Why experts are usually wrong

So why should we think that an idea which flopped 5, 10, or 20 years ago be any less relevant now? Reality is not only specific to each individual and the physical world but it also never stops changing. If someone is an expert in their field, the only reason that they are an expert is that they learned to expertly navigate their own reality and their aligned physical reality over that period up until now.

But no one can know the future — yet — so the truth is that even for experts — past performance is never an indication of future results. They were likely repurposed from past models developed by experts, and they may have worked for the time, place, and disease that they were first modeled after. Why then were the numbers one or more orders of magnitude off?

Simple: the past performance of anything was proven only in the alternate past reality, where the model was a success. There is simply no way to replicate the same level of success in a new or different reality. Different realities drive different results. Some people are worried about this. They think that means that the past has no meaning. That may be true.

But the past is done. Theory suggests that over that time, there should be fifty-eight days when the Dow moved more than 3. Theory predicts six days of index swings beyond 4. And index swings of more than 7 percent should come once every , years; in fact, the twentieth century saw forty-eight such days. People who issue market calls have a nearly impossible task. Predictions are most likely wrong and should be taken with a hearty grain of salt, given what we know about the history of markets.

However, I hope that this article serves as a reminder that most stock predictions are meant to attract attention, rather than provide accuracy. The math is not on the side of the predictors and history should serve as a lesson that even our best experts are likely to be wrong. Therefore, your buy and sell decisions should not be based on a few, evocative articles. If you want to prove that dietary fat is good for you, or that fat is bad for you, you can just keep poring over different patient data until you find a connection that by luck seems to support your theory — which is why studies constantly seem to come to different findings on the same questions.

Fortunately, just being aware of the extent to which even gold-plated expert advice tends to go wrong is a big first step towards being able to filter out the worst of it.

David H. June 13, am. Share This Article. Post was not sent - check your email addresses!