"Experts" = Expertise? Not So Much

When we read Paul Farrell's missives over at MarketWatch, we typically detect a certain hyperventilating huffiness that inspires pronounced eye-rolling around here. But you can often find worthy nuggets amid Farrell's crazy-uncle bluster, and Monday's offering contained a classic (emphasis added in bold):

The data [come] from Philip Tetlock, a research psychologist at Stanford University: "Tetlock's ongoing study of 82,361 predictions by 284 pundits" concludes that their accuracy has nothing to do with credentials such as a doctorate in economics or political science, or on "policy experience, access to classified information, or being a realist or neocon, liberal or conservative."

What matters? "The best predictor, in a backward sort of way, was fame: the more feted by the media, the worse a pundit's accuracy....The media's preferred pundits are forceful, confident and decisive, not tentative and balanced....Bold, decisive assertions make better sound bites; bombast, swagger and certainty make for better TV."

They can be totally wrong, so long as they're assertive and entertaining. "The marketplace of ideas does not punish poor punditry. Few of us even remember who got what wrong. We are instead impressed by credentials, affiliation, fame and even looks--traits that have no bearing on a pundit's accuracy."

Remember this when next you read a decisive forecast from a titled expert...including, interestingly enough, Farrell's own (strange*) announcement of a new bull market in the very piece from which we drew the excerpt above.

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* We call it strange not because it's implausble, but because for all its apparent decisiveness, Farrell's argument descends into a weirdly vague, disabling caveat: "One final, crucial warning: This next bull will be short. First, it will suck money out of the mattresses of investors who are sitting on cash. Then Wall Street will recreate the insanity of the '90's dot-coms and the recent subprime-credit mania." What are we to make of all this? Drawing on Professor Tetlock's findings, we'd tilt toward nothing at all.

Source

Paul B. Farrell, "6 reasons I'm calling a bottom and a new bull," MarketWatch, March 30, 2009