Ever wonder what motivates various pundits, strategists and fund managers to spout off about whatever it is they are yammering on about?

Step back and examine all of the various words spilled on markets. Scratch a little beneath the surface, and you quickly realize that not all participants are in a relentless search for the truth.

A few years ago, I noted that good investors have to wear many hats: One part historian, one part mathematician, one part psychiatrist, one part accountant and one part trial lawyer.

When it comes to market commentary, that last one can be especially helpful. Putting a witness’s motivations into broader context can often shed some light on their position. Why did they say that? What incentives might they have? What are they subconsciously rationalizing?

As I have noted before:

Good litigators are always skeptical, but not negative. Is that witness telling the truth? What is motivating him? Is the opposing counsel’s argument logical? Being able to answer these questions makes for a good lawyer – and a good investor . . . When it comes to investing, everyone is trying to separate you from your money. Good investing requires good judgment. Being able to recognize valuable intel versus the usual blather is a huge advantage.

So let’s play a game of cross-examining attorney.  Continues here.


Category: Financial Press, Hedge Funds, Investing, UnGuru

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “The Biases of Your Favorite Market Pundits . . .”

  1. BoKolis says:

    So you want to be a Rock Superstar…hehe

    Media pundits/talk show hosts, etc., whether or not they are actively engaged in their subject of “expertise,” are judged similarly to bartenders. The guy/gal who gets the sweet gigs is the one who keeps (or has his/her own) customers coming back by helping them to a good buzz, and not necessarily the one who mixes the best drinks (some many people seem to prefer rotgut and sugar).

    A pragmatic steady hand or level head would not catch the media’s radar if it couldn’t draw piles of eyes (it almost seems strange that it could)…also doesn’t hurt when they stop f’n calling you “noted bear.”

  2. betheball says:

    I feel sorry for the dolts who don’t realize this. I wish there was a website that tracked day to day market calls from the “experts” on CNBC.

  3. ch says:

    “Betting on the end of the world has yet to pay off” – spoken like someone that has never lived through a currency crisis.