August 14, 2020
Sometimes you click around the Internet late at night and before you know it you have no idea how you arrived in the random hole you're in. Which is how I came to this article from The Smithsonian, written in 2012, about why experts are almost always wrong.
I don't actually believe the thesis of the article. It's one of those cases where the anecdotes spur interesting thoughts, but they don't substantiate the general theory at which the writer arrived. For the record, the sub-title and the title aren't on the same topic. There is a difference between being wrong about something, and being able to predict the future.
My neighbor owns a chain of jewelry stores. I know very little about jewelry, other than it seems to get stolen from my family members. Because I know little, and people take it, I consult him when replenishment is needed. But I would not ask him to cut off the front of my cornea - for that I'd go to an ophthalmologist. I would look at the little drawings the ophthalmologist made on paper of the looming eyeball trimming, I would pretend to understand what he or she was talking about, and I'd probably proceed because scheduling an appointment somewhere else would be a tremendous pain.
But from the article, read this paragraph about the fox and the hedgehog:
Foxes know many things while hedgehogs know one big thing. Being deeply knowledgeable on one subject narrows one’s focus and increases confidence, but it also blurs dissenting views until they are no longer visible, thereby transforming data collection into bias confirmation and morphing self-deception into self-assurance. The world is a messy, complex, and contingent place with countless intervening variables and confounding factors, which foxes are comfortable with but hedgehogs are not.
The hedgehog union probably would file a complaint on this paragraph, but regardless, it's insightful. It's insightful because at some point you have to know (or try to guess well) when to look away from the established expert, toward a newcomer or disruptor, and when to stay with credentialed authority. This is an ongoing tension in the investment world.
1 Why Experts are Almost Always Wrong, Smithsonian Magazine, July 2012
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