Blog - Investing Notes

October 14, 2008 - Update: Gurus Explain Why They Were Wrong About the Stock Market

The top ten excuses, from the bottom...

10. You took my statement out of context, leaving out all the obfuscatory elaboration, conditional clauses, counterpoints and equivocations. Your judgment is unfair.

9. I was close enough. You should give me credit.

8. I will be right eventually; I just don't know when. (Alternatively: I was right all along, but my timing was off.)

7. I may be wrong on some little things, but I'm dead right on all the big ones. You shouldn't count the little ones.

6. I provide risk assessments based on historical tendencies, not forecasts. You should not call it wrong. The low probability scenario happened, so it was just bad luck.

5. My public statements may be sometimes wrong, but I am 100% right in my private newsletter. You have to pay for the good stuff.

4. Since I am rich and famous, I must be smart. Since I am smart, I must be right. Quid est demonstrandum. No need to check up on me any more.

3. If brokers weren't so manipulative and investors so gullible, what I said would happen would have happened. You should give me credit for my elegant and compelling argument.

2. The Plunge Protection Team (or the President, or the Vice President and his cabal, or the Treasury Secretary, or the Federal Reserve, or the devious prime brokers, or the Japanese, or the Chinese) intervened to prop up the market. You shouldn't count that against me.

1. I was not wrong. You are an ass. [Many variations via multiple sock puppets.]

0. What forecast? Let me tell you about a great new investment opportunity!

For related research, see Blog Synthesis: The Wisdom of Analysts, Experts and Gurus. See especially our blog entry of 4/18/06 for some points on self-attribution bias in the summary of Chapter 4 ("Honoring Reputational Bets") of the book Expert Political Judgment: How Good is It? How Can We Know? by Philip Tetlock.