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The Digital Skeptic: Investors Have Nothing on Election 2012

NEW YORK (MainStreet) -- Two political conventions, $1.6 billion in contributions, $450 million spent on TV ads. And with, what, eight weeks to go investors still have not a whiff of sense if we're dealing with Romney or Obama.

By all means, you can dismiss the confusion as an old-school tight race between two lackluster candidates. But you don't have to be Karl Rove or James Carville to figure out that in this darkening digital age, sinister trends lurk.

Certainly, the information age is doing an executive-level job of presenting gobs of new data in gobs of new ways. Take Facebook (FB) and CNN's Election Insights, for example. Here you will find an interesting-to-look-at, graphical state-by-state breakdown of what people are posting about presidential candidates via Facebook.

The service allows users to very slickly click through various date ranges and watch the states turn red to blue and back as chatter in those states swings between Obama and Romney.  

But what does it mean? Your guess is as good as anybody's.

Sam Lalonde, an Internet marketing strategist with AOD Marketing in Montreal, posted the obvious issue with correlating discussion of a candidate with the candidate's electability: "Since when did someone talking about someone else become inherently positive?"

Attempt to correlate and base a judgement on Facebook's view of the impending election with other social media sources and, well ... good luck with that.

On Twitter, Obama's feed -- @BarackObama -- has 19 million followers and a Justin Bieber-like 99 score from Klout, the San Francisco-based service that ranks social media effectiveness. Republican nominee Mitt Romney only has 1 million or so Twitter followers at @MittRomney. Yet he still earns a very respectable Klout score of 91.

So does that imply we are looking at a razor-thin election margin in two months? Not so fast.

If you dare to check out the many sites that attempt to turn state-by-state polling data into the probability of winning electoral votes -- and victory -- you'll come away even more confused. For example, Electoral-Vote.com estimates that many states such as Kansas that are talking Democratic on Facebook now will vote Republican in November.

And if you compare those state-by-state results for electoral votes, say on a service such as 270towin.com, you'll find none of the 50/50 sentiment that's permeates all this data. Obama is flatly crushing Romney by 125 electoral votes.

But again, even the president's edge is not what it seems.

"Obama's lead in these states is small and within the margin of error," says Andrew S. Tanenbaum, votemaster at Electoral-Vote.com and a professor of computer science at Vrije Universiteit in Amsterdam. "The situation has more or less been like this for months."

In other words, you'd be crazy to bet real money one way or the other on this nutty election.

The information dark age begins
Here we are yet again, friends, staring at yet more investor information-age dysfunction. The sources of critical information needed to manage risk and adapt to change are becoming so plentiful, so uncorrelated and so openly contradictory that making once-basic bets -- including who will win in November some 60 days out -- has become essentially impossible.

Leave it to The Huffington Post to offer the peek at the end-game in election coverage: Its Election Dashboard leaves the choice of who wins up to the reader. Go to the site, create your own model and there you are in own private digital Idaho. Reality be damned.

Media in the digital age has become like paint: Mix enough source colors together and you wind up with a mat, drab, dull gray.

You invest in this murk at your peril.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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