and it’s very important to distinguish between them: There is the expert who can make something happen, and there is the expert who can tell you what he or she thinks is going to happen. Get all the advice you can afford from the experts in category one, but be very, very cautious about the category-two types.
Let me give you one example: One of my best friends was the president of a very distinguished regional brokerage house, and as such had more than a rooting interest in the economic outlook. The firm paid a sizable retainer to a prominent economist who provided them each month with short- and long-range economic forecasts. It was beautifully written, filled with clever quotes and closely reasoned arguments…and always wrong.
Nothing unusual there, as it has been said of economists that they are the only professionals who can make an excellent living without ever being right in their entire careers.
My friend knew all this, of course, but he was afraid to cancel the arrangement because of fear he might someday miss a major turn in the economy. He hedged his bets, though. When he had to make a really serious decision–a major underwriting, for example–he also used the economic forecast feature in Fortune magazine which he bought at the newsstand every other week–and got better results.
Whether it’s economists, the most prestigious of the professional pundits, or stock-market forecasters, or political analysts, or just plain old sports handicappers and racetrack touts, my advice is the same: Be extremely leery. Rely on these people to tell you why something happened, but don’t rely on them to tell you why something is going to happen. They don’t know any more than you do–and neither do their computers. When it comes to forecasting events with a large number of highly volatile variables, any one of which could determine the outcome, experts are less than expert.
Trust yourself and your gut, and you’re likely to do at least as well.
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