The market was smart that day because it satisfied the four conditions that characterize wise crowds: diversity of opinion (each person should have some private information, even if it’s just an eccentric interpretation of the known facts), independence (people’s opinions are not determined by the opinions of those around them), decentralization (people are able to specialize and draw on local knowledge), and aggregation (some mechanism exists for turning private judgments into a collective decision). If a group satiisfies those conditions, its judgment is likely to be accurate. </p>