Even since my workplace put a television screen in the lunch room, I’ve gotten a regular dose of the kinds of things that TV offers. I find it incredibly distressing to see that this is the sort of information America relies on.
Based on my re-acquaintance with live TV, I know that next week, while the financial markets roil (or not), we will have lots of Black Swan [1] moments by all of the financial “experts.” Namely,
The Black Swan Theory or Theory of Black Swan Events is a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight.
The theory was developed by Nassim Nicholas Taleb to explain:-The disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology
-The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)
-The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs.
Truly, I don’t know if there’s any sort of “expert” that annoys me more than financial markets “experts,” especially highly credentialed well-coiffed economists who “explain” things only after they already know that those things have happened. When has any such expert ever had the courage to predict a major development in the market ahead of time? How many “experts” predicted that they market would lose 7% last week (or even predict that it woudl lose 2%?). I suspect that I (and I’m not a financial investment expert) could make up lots of “reasons” for anything the market does, as long as you tell me what happened before I need to give my reasons. If the market went up 1%, I’d say, “You see, the DOW is up 1% because Ben Bernancke stuttered in a press conference and China’s 3rd biggest computer factory is 17 days ahead of schedule. And, oh yeah, because a butterfly flapped its wings in Dayton.” I could get away with this kind of crap for many years, especially if I were a fast-talking TV “expert” whose pathetic record (i.e., whose lack of meaningful predictions) was (almost [2]) never held up to ridicule.
We should make these jokers always videotape their analyses the day prior to the market-day they are analyzing. We should make them record their analyses in that same cock-sure tone of voice they use when they “explain” what has already happened. If we did that, 99% of them would look like idiots. They can’t predict short-term markets any more than a historian can predict what will be in tomorrow’s newspaper. They lack the honesty to say that they don’t know. Or maybe they are so arrogant and dense that Dunning-Kruger [3] runs rampant.
Let the silliness begin on Monday.
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