The Washington Past has a story about web sites that use a “wisdom of crowds” approach to predict the outcome of sporting events and stock performance. PicksPal, featured in the article, has an interesting business model.

Last month, PicksPal began identifying the 30 most successful players over the previous five weeks. Whenever these experts together place enough of their accumulated points on a specific bet, it qualifies as a “genius pick” and is offered to the public for $19.95. Jessiman said the genius picks, which average five a day, are hitting 70 percent of the time.

For $20 a month you can subscribe to market predictions aggregated from Marketocracy the 100 best performers in their fantasy market.

Marketocracy Data Services is a research company whose mission is to find the best investors in the world and then track, analyze, and evaluate their trading activity. … Marketocracy has recruited over 55,000 people to manage over 65,000 model portfolios at www.marketocracy.com that compete to become the best investors. For over 3 years we have tracked, analyzed, and evaluated their virtual trading activity and have accumulated a massive database; following over 10,000 stock positions at any one time and more than four million trades.

SocialPicks, which is not yet launched, will combine social networking with stock picking

SocialPicks is a community for stock market investors to share investment ideas, exchange market research, and track peers’ investment performance. Sign up if you’d like to explore what we’ve built thus far and find out when we officially launch.

All of this relates to James Surowieckis 2004 book Wisdom of Crowds about the aggregation of information in groups, resulting in decisions that are often better than could have been made by any single member of the group. Of course, I always thought that was how the stock market and paramutual wagering worked in the first place.