Beware of the Hearsay Experts
Posted By: Admin
One needs to beware of hearsay experts, while they abound, in the investment world, they could be leading you to actions that could be disastrous.
Max Planch, the Nobel Laureate for Physics in 1918, was having a torrid time post the award travelling across Germany delivering the lectures on Quantum Mechanics to audiences from Academia, Industry, Businessman and Students. Over time , his car driver knew the talk by heart. Since his master was visibly tired, he once suggested in one such meeting they swap roles. So Max wore the driver's attire and drove the car, while the driver went in and did an admirable job of the hour-long lecture. After the claps had died down, a professor in the audience asked a technical question, for which the driver playing the role of Max Planch had no answer. So he did the next best thing… he said” I never knew that such a distinguished audience would ask such a simple question, which even my driver can answer. Lo & behold the driver( the real Max Planch ) saved the day.
In today’s age, there are very few experts, the rest are at best purveyors of the same information, which they embellish with their own inputs to suit themselves. So be it the news anchor in a business channel or the neighbour who thinks he knows it all, they all are merely parading information that they have heard from someone else.
The best way to overcome hearsay experts is as Charlie Munger says is to Stick to your circle of competence. Knowing what you know and knowing what we do not know is an important part of decision making. While you are free to make decisions on your area of competence. In the area outside of your knowledge or competence seek out the advice of experts you trust, for that’s the way you will get the best experience.
So the next time someone is on TV, predicting the stock market outcomes or trying to play the expert, you need to have your antennas up.
Nobody can predict the short term future, Nobody needs to predict the long term future because we know how it will play out, if you recognize this truth, you can save yourself from hearsay experts in Stock market investing.
By Babu Krishnamoorthy, Chief Sherpa
Category Finsherpa | Tags Financial Freedom
