Be careful of trusting the "experts"

 (or should you?)

David Freedman is interviewed on the problems with expertise, specifically in the medical field

Years ago I often used to listen to the economic discussion hour on Classic FM while driving home from work. One night the presenter said something that I have remembered almost verbatim to this day:

"Research has shown that the experts are wrong 70% of the time. By that measure, wouldn't it make sense to subscribe to the very best advice - and consistently do the opposite? And with that thought I bid you all good night..."

Whether the statistic is correct is probably impossible to say for certain. I have lived long enough, however, to have come to see that the experts are wrong very often indeed. And that in many cases, contrarians are the ones that perform the best. They are the salmon that always swim against the stream of popular thought, of mass migration, and of accepted thinking. Those are the fish which, if not caught and eaten by bears when they clear the rapids, often tend to reach the choicest spawning grounds.

In this book, Wrong: Why experts keep failing us - and how to know when not to trust them, David Freedman makes some startling claims. For instance:

• He asserts that economists have found that all studies published in economics journals are likely to be wrong. 
• Similarly, he claims that tax returns that are completed privately contain far less significant errors than those prepared by professionals. 
• And about two-thirds of the findings that are published in renowned medical journals are refuted within a few years. 

This does tend to make one think. When asked when the right time to buy is, Lord Nathan Rothschild once made this famous reply: "When there's blood in the streets." In other words, doing the exact opposite of what everybody else would be doing.

I remembered this quote one day when I met a fairly young and very substantial landowner and asked him how it was that he was able to acquire such vast land holdings. He told me that when he was younger, he had a little bit of a capital surplus one season. It was around the time of South Africa's change of government in 1994 and a lot of people were selling out at rock-bottom prices in anticipation that the country would collapse.

He felt that it was worth taking a chance at least once. He did not really know much about investment, but he knew that hanging on to cash was a good way of losing it. So for lack of better options he bought land. And that was when he discovered that the best time to buy was when everybody is telling you that you'd be crazy to do so. In fact, by this rule, the more your bank manager advised against it, the greater your chances might be of being right.

And so it is with technology also. At www.cloudconnect.co.za where we deal with future technology, we often come across customers who insist that it is dangerous to dare to break with convention. Copper cables have delivered connectivity to the world for so long, they argue, that it must be good, even though it is ridiculously expensive and the service is shockingly bad. Land-based telephony is safer because that's what everybody uses, right? And why take the risk of doing more business online? Don't you still remember the dotcom crash in the world markets just a a few years ago?

How easy it is to see ghosts when one wishes to believe in them!

Plentiful are the fearful, and narrow is he vision of those who do not understand the future. The truth of the matter is that the future has always been a shark's tank. But it is often no more dangerous than the deadly quicksands of long-established convention. The only difference is that by chaining oneself to old-fashioned thinking in business, death comes far more slowly. In the end, it is in most cases a completely assured end.

That is not to say that one must abandon all good sense and reason. The principles of successful business and innovation have never changed since the beginning of time. The forces of economics never change. Only the application thereof. There is a very big difference, and those who do not understand it are destined to suffer an unexpected awakening.

But then there is also the matter of fun. Staying within the comfort zone that is created by the presence of a large herd of old-fashioned beasts may be many things, but it certainly lacks the fun factor. Being a bold adaptor of new solutions, new thinking, new technology, new way of applying old theory - this holds an element of excitement which simply cannot be had in the mud wallows of mindless convention.

In life it is a fact that anything that stops growing starts dying. Economics know that. Biologists affirm it also. Why do we so often forget it? What is it in us that makes us so desperately afraid to be contrarians? Perhaps that is why we attach such morbid value to the muttered prophecies of experts. After all, expert opinions so often support our own fears and give us all the reasons we need not to try something new.

I often think of myself as a salmon. And when I do, I'm sometimes reminded of at least one expert who admitted the truth to me. It was around a campfire one night when a good friend of mine - a medical specialist - leaned over and whispered to me: "Just between me and you - we don't have a cooking clue what we're doing..."

But that's OK. I have learned in life it's OK to not always know what you are doing. As long as you are doing something.