Thursday, September 1, 2011

How to be an Expert in 2011

Wherever you look these days, there are experts.  There are sports experts, politics experts, terrorism experts, social media experts, financial experts, and I'm sure there are "expert experts" somewhere.  I'm not sure what an "expert expert" would do, only that Sarah Palin would hate them. 

I think it's safe to say that we've reached the point where the word "expert" has lost all meaning. 

The Traditional Expert

Until recently, there were really two ways to become an expert: either be deemed an expert by another expert based on experience or complete some sort of academic sequence (a PhD, for instance) and write high-level academic literature on their selected topic.  Once an expert was identified, the expert would usually teach, write, and offer advice.  Your traditional expert was someone like Albert Einstein, Robert Oppenheimer, Henry Kissinger, or Stephen Hawking (trust me, they all have Wikipedia pages). 

Occasionally, they'd show up on the nightly news in a limited capacity to opine on a specific relevant matter.  Having this forum did not make them experts, instead it was their expertise that allowed them to have the forum.

The term "expert" meant that someone is recognized by others in their field as having a very high level of knowledge compared to other top people in that field. 

An Expert Today

With the growth of the internet and the 24-hour-a-day news cycle, this dynamic has been reversed.  Experts are deemed experts because they give opinions.  The only qualification for being an expert these days is to be able to speak or type (and, no, I'm not going to make a Stephen Hawking joke here, but I won't think less of you if you do). 

Experts can make a lot of money.  They are treated as celebrities.  Their opinions matter.  Not a bad deal just for giving your two cents.

Here's a step-by-step approach to becoming an expert in today's world: 

Step 1- Choose Your Field

This is where a lot of would-be experts lose their way.  They set out to be experts in areas like physics, economics, and engineering.  First of all, those things are all complicated and hard.  You need to go to school and work in your profession just to pick up the correct terminology. 

More to the point, you want to avoid any areas where others can prove you wrong.  If I opine that energy does not equal mass times acceleration squared, I'm going to get an argument.  Other experts will want to see my graph-lined paper and have me show my work.  They may determine that I've made a serious error or that I am, in fact, full of shit. 

It is with this in mind that I offer you to stick to the following list of expertise: fashion, investing, fantasy sports, and celebrity gossip. 

These areas have everything you could want.  People are eager to hear about these things, much of it is subjective and nobody cares enough to take the time to argue with you even when you're proven wrong or discredited.

Step 2- Be Right  

A friend of a friend of a friend is a financial planner working in New York.  He actively manages his clients' investments (meaning that he decides on trades and buying and selling investments on his clients' behalf).  At the beginning of the financial crisis a few years back, he admitted that he had no idea what the stock market or any other market was going to do.  His came up with a smart solution.  He divided his clients in half and, unbeknownst to his clients, had half of them long the market (betting that stocks would go up) and half short the market (betting that stocks could go down). 

In sports terms, he had moved from gambler to bookie.  Half of his clients (the ones for whom he had short the market) made a killing.  The other half got ruined.  Without knowing his strategy, these clients who made money believed that his success with their money was the result of the his expertise.  He built trust with these clients and probably got quite a few referrals from these folks.

It's a variation of the old gambling advice scheme: In week 1, I call 200 people and tell half of them to pick the Dolphins over the Bears and tell the other half to pick the Bears over the Dolphins. In week 2, I call back the 100 that got the correct pick the previous week, and tell half of them to pick the Eagles over the Redskins and the other half to pick the Redskins over the Eagles. In week 3, I call back the 50 people who got both correct picks and offer to sell them my week 3 pick.

The lesson here: how you are right is irrelevant, just so long as people think it's because of your expertise.

Step 3- Don't Be Wrong

I don't know how many experts work at CNBC (the 24-hour finance channel), but it's roughly the number of people who have ever appeared on the network minus four.

Most every expert who opines on the network gives their opinion on which stocks will go up in value and and which will go down.  Statistics have shown that even the most revered stock pickers make less than the broad market nearly as often as they beat the broad market. 

(As an aside: Wall Street folk get paid an insane amount of money to be right as often as they're wrong.  Why?  Because people think they're experts, of course.)

So, if an expert says a stock will go up and the stock goes up the next day, he's right.  On the contrary, if that same stock goes down, he's wrong... except when he's right.

Allow me to explain.  Let's say that stock that he said would go up was valued at $50 a share when he made the prediction.  The next day it drops to $48.  A week later, it bounces back to $51 a share.  Tadaa!  The stock has gone up!  By giving a unspecified time frame, the expert can look backwards and declare himself correct.  The expert has willed it to happen with his expertness.

And we're not done yet.  Let's say the stock doesn't bounce back up from $48.  The expert can compare that stock the rest of the market or other similar stocks.  The stock may have performed well relative to other stocks, even if it didn't go up.  The expert has saved you from owning even shittier stocks!   He's some sort of wizard! 

Step 4- Go Big

Earlier this year, the media jumped on as story about a religious leader predicting the rapture for a specific day.  For a long time, I could never figure out why anyone would try to predict the end of the world.  If you're wrong, you're wrong.  If you're right, you're dead.   But now I understand.  He was completely wrong about the rapture and was mocked for about a day by for being wrong, but then most people forgot about the story. 

Now, what happens when another holy man predicts a definite future date as the end of the world?  Who will the media want to talk to?  That's right, the guy who was wrong the last time.  We'll get an opinion and a new "expert" on the end of the world.  And all he had to do was be completely wrong!  Good stuff. 

Step 5- Shoot the Moon

Every ridiculous opinion is a lottery ticket.  If an outrageous prediction sticks, you may get to expert status without passing Go and collecting $200.

This works for any would-be expert.  Pick any college freshman and declare that he'll be the best basketball player of all time.  Pick a random investment and opine that it will triple in value or become worthless.  Declare that Hunt's Tomato Catsup will become the new currency in the Euro Zone.  Speculate that Jennifer Aniston will eat 50 pounds of Twizzlers on her 50th birthday.  Type a blog post about how gay marriage will destroy daylight savings time.  C'mon, it's not like the internet is charging by the word.

Just know that if one of these comes through, you will be the person who correctly predicted the unpredictable.  And even if you get it wrong, you may still get to be an expert. 

Step 6- Profit!