Please see Larry Swedroe's article at etf.com at this link and text below. I am so compelled that I just ordered the book he is referring to called "Wrong".
Once I read it, I will edit this post to include my thoughts on the book.Larry Swedroe's article click here.
Article Text:
Many individual investors have seen their portfolios devastated, despite having followed the advice of “experts.” They are left wondering, “What went wrong?”
As you may have already guessed, the answer is that following the advice of “future tellers” disguised as investment pros is the wrong strategy. As Jim Cramer once famously said to Jon Stewart of The Daily Show, “I got a lot wrong.”
Investment legend Warren Buffett put it this way: “A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting.”
Distorted Expertise
David Freedman, in his outstanding book, “Wrong,” shows us that experts are often the reason we get into big messes, whether they occur in the field of medicine, investing, science, psychology, raising children, dieting or business management.
With sometimes frightening examples, Freedman exposes the biases and career pressures that frequently lead experts to arrive at their advice in dangerously distorted ways. Since much of the book is devoted to the field of medicine, it can be a terrifying read that leaves you uncertain about what and who to believe.
Freedman notes how biases and corruption can play a role in expert recommendations. He explains: “Most of us think of scientists as being devoted to uncovering truths, not pumping their career prospects. Less formal experts don’t enjoy that sort of halo. To win promotion or even simply keep their jobs, law-enforcement officials have to wrestle with the sometimes vicious politics racking the administrations they serve and stockbrokers desperately struggle to corral new customers lest they not survive the next round of pink slips. For such experts, actually being right isn’t always the best path to career success. There have been endless accounts of doctors ginning up unnecessary or overpriced tests for patients carried out at labs in which the doctors are investors, of government officials who receive favors and kickbacks, or brokers churning accounts to raise commissions and so forth.”
Freedman observes that a wide range of economists and even mathematicians—as well as many nonscientist financial experts—have demonstrated quite clearly for about a century that no matter what technique you use to pick stocks, you’re not likely to beat the market.