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> "I disagree, i do think we may have a misunderstanding on experts." I have no problem with "experts" in general, but I do think we have a misunderstanding wi
by ZenoArrow 9y ago
> "I disagree, i do think we may have a misunderstanding on experts."
I have no problem with "experts" in general, but I do think we have a misunderstanding with regards to experts in the field in question.
What incentives are in play for the experts behind that website to be honest? Let's conduct a role play. Consider that I'm the expert in question, and I decide I want to short the stock for a company (i.e. bet that the stock price will fall rather than rise). In this situation, what would be the best advice I could give on this website to make sure my bet works out? I would mark down my "confidence score" (which is effectively what the website publishes) in order to maximise my chances of making money. The financial health of the company is secondary. The financial health will have some influence on how likely the bet I placed is likely to succeed, but it's not the only factor at play.
Benjamin Graham (Warren Buffett's mentor) summed up the most obvious path for a successful investor to take by stating "The intelligent investor is a realist who sells to optimists and buys from pessimists.". Taking this a step further, without knowing the financial position of the "expert" you're getting advice from, how do you know if the "expert" is in the market to buy, to sell, or is neutral? I would suggest to you that you don't know that, and with that in mind any advice you get from an anonymous investor is advice to be taken with a large dose of salt.
Just in case you think I'm just describing a hypothetical situation, there have been high profile cases where investment firms were caught betting against the advice they gave their clients. For example:
http://www.independent.co.uk/news/business/news/goldman-bet-against-securities-it-sold-to-clients-1953406.html http://www.independent.co.uk/news/business/news/goldman-bet-...
- lettergram 9y agohttps://blog.projectpiglet.com/2018/01/causality-in-cryptomarkets/ https://blog.projectpiglet.com/2018/01/causality-in-cryptoma... Typically, I just run the numbers and it usually works out. I see your point though, any suggestions?
- ZenoArrow 9y ago> "Typically, I just run the numbers and it usually works out. I see your point though, any suggestions?" I'm not an expert, but I believe Buffett's advice of 'invest in what you know' is sound: https://www.simplysafedividends.com/warren-buffett-investment-advice/ https://www.simplysafedividends.com/warren-buffett-investmen... https://www.marketwatch.com/story/the-genius-of-warren-buffett-in-23-quotes-2015-08-19 https://www.marketwatch.com/story/the-genius-of-warren-buffe... In other words, it pays off doing your own research into the financial health of a company, to determine whether a company is currently undervalued or overvalued. Should be noted that this approach works best by taking a long term approach when buying stocks, as you may have to weather some short term market irrationality.