Why can not trust to experts

Fatal mistakes of Financial Analysts.

What will happen to the ruble? When restored, the Russian economy? Is 2008 the year the recession again? the answer to these questions no one knows, but it does not interfere with financial analysts and political scientists base their forecasts, which are then guided by the mass of people. "The Secret" book and studied the research that explains why expert predictions should not be taken seriously.

Monkeys cope not worse than experts

Professor of psychology at the University of Pennsylvania Filip Tetlok conducted the most extensive study to date of the political forecasts. In 1984, he asked 300 experts to make a prediction about the political development of several countries. Gathering 80 000 judgments, Tetlock for 20 years, watched some of them are correct. Results of the study he cites in his book Expert Political Judgment.

Tetlock concluded that the interviewed experts strongly overestimate their predictive ability.

If the monkey to throw darts at the target, symbolizing the different versions of events, their result would be the same as those of experts, - he explains.

According to the study most often mistaken experts, who are guided by one great idea or theory. The best results showed the experts use many different sources of information and analytical models. In addition, for a good prognosis it is important to remain flexible and not be over-confident: it helps to more easily reject misconceptions about the future.

We are overly optimistic

Psychological studies have shown that many people think that they desired for events will occur with a high probability, than they occur in reality. This applies to a wide variety of issues. For example, people unrealistic to assess their capabilities and assume that personal finish projects faster than it actually can. Students are also expected higher on exams assessments than to yield. In addition, graduates of MBA programs overestimate their career prospects.

Excessive optimism applies to financial analysts. Professor at the University of Akron Thomas Calderon studied economic forecasts of experts and came to the conclusion that they can predict periods of growth or corporate earnings fall, but always overestimate their volume.

Danish scientist Bent Flivborg colleagues examined projects of big business and came to the conclusion that even when people tend to think in detail a plan of action with all possible costs, they still tend to overestimate their capabilities. Flivborg also noticed a pattern: often biased experts do deliberately optimistic forecasts and underestimated, for example, the cost of major construction projects. Then, when the costs are several times larger than planned, the same experts exaggerate the potential benefits of the new project.

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