- Books, Literature, and Writing»
- Commercial & Creative Writing»
- Creative Writing»
- Humor Writing
Analysts Are Overpaid: The Truth About "Experts"
Ever wonder why the weatherman can't seem to get anything right? Ever take the advice of a leading financial expert, only to lose money? Ever take the advice of a sports analyst on which team will win, only to be disappointed? There's a reason that these "experts" fail so much, and truth be told, you could do the same job they're doing. They simply managed to find a better position than you to forecast the future. But the truth is: they don't know anymore about what's going to happen than you do.
All experts are basing their opinions on a few things: previous trends, normal behaviors, and their experience. In all honestly, those are the only types of data they can account for because that's all anyone could ever account for. Here's why all of that is wrong, and you're just as likely to draw the right answer out of a hat as these people are to correctly predict future events on a regular basis.
You will often times see experts basing their opinions on future events by following previous trends in similar circumstances. The issue with that is that the expert isn't taking into account every possible variable, including variables they are unaware exist. So even though the variables that created the first event are present and would seem to indicate that a previous trend may reappear, other variables will always be present, and it's mathematically impossible for the "expert" to include all factors. Some factors, events that Nassim Talen, PhD, called Black Swans, are so momentous and unexpected, that they can change the course of history. Think stock market crashes and wars. I'll explain more about these events a little later.
Analysts also rely too heavily on what they expect to be normal. A normal response to A is B, therefore if A happens then B will be the response. The problem with that rationale, much like the previous section about trends, is that behavior is far more complex than A = B. In a classroom setting, A = B makes sense, but in the real world variables are far more complex and chaotic. Even though A has equaled B in nearly all cases, that doesn't mean that in any future situation the same will happen. It may be likely, but it's not certain.
Experience is what makes an expert and expert. The expert has had X amount of years in their particular field, so they are deemed to be knowledgeable about the topic. Since the expert has had success doing what they do and observing what they observe, they often times assume that what they know about the topic is correct because of their anecdotal experience. The problem is that anecdotal experiences don't reflect all real world conditions when it comes to predicting future events. Just because A worked for the expert, doesn't mean that it's going to work for you in three years. We give these people expert status because of their experience, but being experienced doesn't make you more likely to predict future events than anyone else.
There are far too many variables to predict any future event in any area of our lives. Not only are there too many variables, but there are variables that weigh far more than others. In sports, in stocks, in life, one single event can make such an enormous impact that all other variables that would point toward one outcome become meaningless. For example: a football team with an amazing running back and offensive line is playing against a team with terrible run defense. The team with the amazing running game should win, but if the starting left guard breaks his leg in the first quarter and the running back had a fight with his wife the night before the game, the better team may have a more difficult time winning the game than initially anticipated.
Experts may know a considerable amount about their fields, but that doesn't mean they can predict the future. There are simply too many variables and too many unknowns. So, next time someone gives you advice on something they expect to happen in the future, politely say thank you and then politely throw that advice in the trash, because that's what it's worth.