Be Careful about which Gurus you listen to
Ever wonder why guys like Jim Cramer or politicians with terrible track records (take your pick) are popular despite making some horrendous judgment calls?
or why Disbarred lawyers like Jack Thompson, manipulative CEOs like Patrick Bryne or stock pumpers like Charles Payne are "experts" on Fox News?
or why certain analysts are more popular than others depsite making the same accurate calls?
Wonder no more
" Humans prefer cockiness to expertise....
The research, by Don Moore of Carnegie Mellon University in Pittsburgh, Pennsylvania, shows that we prefer advice from a confident source, even to the point that we are willing to forgive a poor track record. Moore argues that in competitive situations, this can drive those offering advice to increasingly exaggerate how sure they are.....
the more confident advisers found more buyers for their advice, and this caused the advisers to give answers that were more and more precise as the game progressed...
Moore said that following the advice of the most confident person often makes sense, as there is evidence that precision and expertise do tend to go hand in hand....
There are times, however, when this link breaks down. With complex but politicised subjects such as global warming, for example, scientific experts who stress uncertainties lose out to activists or lobbyists with a more emphatic message..."
Nowhere is this more true in my experience than talking with reporters. Reporters hate good scientists because they talk in probabilities. But they love buffoons who throw easily digestible sound bite reckless guesstimations. Why? Cause they need a narrative to get people to watch. And the more dramatic it is , the more interested people usually are.
Learning this key fact has helped me land a ton more interviews and tv time when I've sought it. It's frighteningly easy to get in the paper as an "expert" these days if you want to.
I suppose it makes some sense, after all it is hard to judge an expert's opinion if you yourself have little first hand knowledge of the subject. You need some sort of workaround to gauge it's validity. Specificity and confidence are two very rational ones to choose.
as an addendum, this observation also fits wth my personal experience with dating/marriage etc. The men who are conifdent always seem to attract women, whether they are "nice guys"" or jerks. The saying "nice guys finish last" is probably more correctly stated as "men with low self esteem finish last" at least when it comes to the dating world. Unless you are Tasty, then you have a severe problem with the ugly tree. :)
In any event if there ever was a study that proved you should do you own due diligence this is it. Always use multiple independent sources if you can. Let the data guide you to your conclusion, not the speaker. Its the information age, you have no excuse for ignorance other than laziness.
And if you are one of the sub twenty single pick players who like JBII.OB that means you have to understand that real DD is more than reading Press Releases from an obviously biased party.:)