Experts are experienced individuals with a good track record (have a good reputation and are widely trusted) and reliable authority of knowledge relative to the audience. They usually have formal training (are generally highly educated from accredited institutions), regularly share their opinions, and are valued by society (generally earn a high income and have developed a cult following).
As an investor, one must use expert's opinions. This is because talking to an industry expert or ex-CEO of a company, for example, allows you to gain access to specific knowledge and develop specific insight about the industry and the specific company.
However, expert-opinion must be treated with a healthy dose of skepticism. Firstly, one must acknowledge that experts are often overconfident. Furthermore, they are often in an ivory tower (this is particularly true for academic experts), and out of touch with reality. Moreover, one must remember that expertise is perceived to exist. This is the most important point, because charismatic pseudo experts can lead one to make ill-informed decisions.
So, we must use expert opinion - with a grain of salt.
As an investor, one must use expert's opinions. This is because talking to an industry expert or ex-CEO of a company, for example, allows you to gain access to specific knowledge and develop specific insight about the industry and the specific company.
However, expert-opinion must be treated with a healthy dose of skepticism. Firstly, one must acknowledge that experts are often overconfident. Furthermore, they are often in an ivory tower (this is particularly true for academic experts), and out of touch with reality. Moreover, one must remember that expertise is perceived to exist. This is the most important point, because charismatic pseudo experts can lead one to make ill-informed decisions.
So, we must use expert opinion - with a grain of salt.
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