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Disparaging Experts: Financial Advisors' Daily Digest

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By SA Gil Weinreich :

Jeff Miller, a financial advisor, markets expert and popular contributor on this site, is known perhaps above all for his efforts to sift through data and distill items likely to bear on markets through his "Weighing the Week Ahead" series published Sundays on Seeking Alpha.

So one pays attention when he writes an article questioning an expert's understanding of the data he is interpreting - in this case, the economic and markets analysis of an international affairs expert, Dr. George Friedman. Miller writes respectfully of Friedman's expertise, just questioning whether it extends into the areas he is now writing about, in ways he worries might mislead. Adding to the fugue-like geometry of this discussion, expert Miller critiqued expert Friedman for, among other things, knocking the expertise of government agencies providing data that he needs. As Miller writes:

The current trend to disparage experts is overdue for some careful examination. Does Dr. Friedman still claim status as an expert in International Strategy?....I certainly think he is. If so, what is he doing opining about labor economics and statistics? One reason that people lose confidence in experts is that there are too many imposters!

Read Miller's article to sharpen your critical thinking about the issues the financial media conveys to investors. For my part, I'd like to raise some broader issues about expertise in hopes of helping investors think more critically about what they are reading, and to perhaps help sort out the question as to whether we should be attentive to or suspicious of experts.

One who devotes tremendous time, effort and concentration to learning a complex body of knowledge does indeed develop expertise, and that expertise merits the respect of non-experts. The problem that arises, however - and this problem is inherent in human nature - is that the frequent consultations and accolades that go with the territory of being an expert incline a person to arrogance. My point is not that the expert than becomes unpleasant to be around - but that the arrogance itself can ultimately distort the person's expertise!

How so? For one thing, high-level experts often feel they have no need to consult those of lesser knowledge or ability, which then denies them the critical input of other ideas and perspectives. In other words, an expert should consult those who know less than they - for example, a professor's most valuable insights are apt to come from his students - but some do not do so. This fault is especially apt to occur in the media. If you're an expert in a certain area, and write a daily column on that area, you're bound to treat issues that perhaps extend beyond your expertise by virtue of the frequency of your writing. This is a difficult test of character and the reality that readers come to regard you as an expert may fuel an expert's sense of his own infallibility.

Just like markets exhibit bubble tendencies, so too do experts' egos inflate to bubble-like proportions, which leads to the "current trend to disparage experts" of which Miller writes. He's correct of course. We need experts and we need leadership. But we also need humility and discretion. Indeed, these qualities go hand in hand, such that experts living in a bubble cease to offer a relevant perspective.

In conclusion, I think this is an opportune moment for me - as the author of a daily column - to gratefully acknowledge the regular input I get from readers from whose wide-ranging knowledge I routinely learn from and am inspired by.

We welcome your thoughts in our comments section, as always. For now, here are other financial advisor-related links:

See also July 2017 Median Household Income on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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