Comments

There is "know how," "know what," and "know who." Only expertise in the latter will help you predict the future. If no one is studying it, then you can count on it not chaning. When I go back and review a few of the fields I'm interested in, I'm shocked that nothing has happened over the last twenty years. But, it turns out that nobody is interested, so nothing of interest happened.

Posted by David Locke at December 7, 2005 4:07 PM

I read a very good book on Decision making a few years ago. This described an interesting experiment based around the results of a medical test (Bender Gestalt test)

THey did 3 groups Psychologists with many years experience reading the results of this test. Student traininees, and the secretaries of the psychologists.

results

psychologists 65%

Students 67%

secretaries 70%

The problem was that people were not learning from their experience. Gut feel is only good if it is part of people learning from experience and (something people are not good at) evaluating and marking themselves over time on how good their decisions are - we tend to post justify bad decisions rather than say "no we got wrong there"!

Posted by PaulH at December 8, 2005 11:30 AM

Paul, your "learning from experience" point (how lousy we are) is the primary reason that the good though rudimentary artificial intelligence-expert systems programs readily outperform human experts, even at very complex tasks.

Posted by tom peters at December 8, 2005 12:15 PM

I think it is equally a matter of too much information. Blasphemous as that may sound, the information overload leads to over-analyzation that can cause an 'expert' to read so deeply into every indicator that he 'misses the forest for the trees' (I think that's how the saying goes). Meanwhile the novice is able to see the fairly obvious (or likely) solution, simply because he doesn't know he's supposed to be tearing each piece of information apart to look for its 'deeper, hidden meaning'. I remember reading somewhere, perhaps one of Malcolm Gladwell's books or articles, about a study where random people were given extremely basic indicators of how to predict the weather. They turned out right at least as often as the professional meteorologists. I think of economists and analysts who dig through piles of formulas and indicators, and I have to believe the marginal return on each piece of additional info scrutinized must be extremely low. Somewhere along the line you need to apply the 80/20 or even 90/10 principle. I'm convinced that if I analyze something long and hard enough it will tell me whatever I want it to tell me (making my 'objective' analysis worthless).

Posted by Paul at December 8, 2005 5:11 PM

There's a tangent to this point that's interesting also: people tend to overestimate their average at making correct predictions. I read a study (perhaps in Money Magazine years ago) that amateurs who play the market BELIEVE they're much more successful than they are statistically, a false confidence that can have disastrous consequences.

Posted by John O'Leary at December 8, 2005 10:10 PM

John, it goes both ways, like so many things in life. Inappropriate optimism causes stock losses, but it is the primary determinant of what makes a good-great salesperson (see Marty Seligman's work).

Posted by tom peters at December 11, 2005 8:17 AM