Sunday, 9 March 2008

Hedge funds and opinion polls

One of the stories I spotted last week was the news that online polling outfit YouGov plans to form a joint venture with a hedge fund. According to this piece in The Times, the idea is that YouGov polling could be used identify changes in public opinion towards, say particular retailers.

In fact this isn't a new idea. I remember reading a piece in the FT probably at least two years ago suggesting that opinion polls might be used by retail analysts. I never saw anything come of it though.

The Times piece is pretty short of details - no doubt YouGov wants to keep its cards close to its chest. It does make you wonder about a few things though. Will opinion polling tell you anything that isn't already happening and thus, in the case of listed companies, is already factored into the share price? And isn't there a danger that people might be dishonest about, say, supermarket preferences (are many going to say Lidl is their favourite?).

There is something deeply old school about the idea that I do like. Afterall all the guff usually given to explain investment choices this one looks like it could be nice and simple. We ask the public what companies they like and then invest in them.

3 comments:

Charlie Marks said...

I'd probably say Lidl was my favourite supermarket. It's close, cheap, and sometimes they give away bread if it's the last day of display.

But alas, how many pollsters are interested in paupers like me?

Tom Powdrill said...

Maybe you're more honest than most. I thinking about this in terms of the way that election polls always used to underestimate Tory support in part because people were ashamed to admit they voted Tory.

Charlie Marks said...

I am honest, that's for sure. But I've never been approached by any of the polling organisations. A close friend was hassled for months by Mori - they wouldn't give in, despite protestations that she would not part with opinions or personal details.

As for being ashamed to vote Tory, here I am tempted to reference a certain french philosophers comments on the downside to universal suffrage - you can, within the solitude of the voting booth, both stab your friends, family and work colleagues in the back and at the same time shoot yourself in the foot. The shame in voting Tory must surely be (I speak for my own friends and family) the stupidity of it: I know of few people who gained more than they've lost in the last 29 years of Tory rule...