Saturday, June 07, 2008

"The Myth of the Expert"

I'm reading a great book on trading right now by Curtis M. Faith (great surname for a trader, no?) called "Way of the Turtle".  Check the link for more detail on Faith's background in trading, but basically he was the product of a bet between two successful traders who wanted to see if they could train anyone to be a good trader - if trading skill was innate or learned (apparent answer: a bit of both, but probably not in the ways one would presume).  I'm about halfway through and found this great quote which applies not just to trading, but to really any field of knowledge and very much so to Mideast politics, in particular as expounded upon in the US post-9/11.  Here's the quote from pages 134-135:

Unfortunately, in most fields the number of people who really understand what's going on is very limited. For every true expert, there are scores of pseudo-experts who are able to perform in the field, have assembled loads of knowledge, and in the eyes of those who are not experts are indistinguishable from the true experts. These pseudo-experts can function but do not really understand the area in which they claim expertise.

True experts do not have rigid rules; they understand what's going on, and so they do not need rigid rules.

Pseudo-experts, however, don't understand, and so they tend to look at what the experts are doing and copy it. They know what to do but not why it should be done. Therefore, they listen to the true experts and create rigid rules where none were intended.

One sure sign of a pseudo-expert is writing that is unclear and difficult to follow. Unclear writing comes from unclear thinking. A true expert will be able to explain complicated ideas in ways that are clear and easy to understand. [Non-Arab Arab interjection: I would argue that the reverse is also true, that pseudo-experts often take genuinely complex realities and - not understanding or deliberately avoiding that complexity - they dumb down reality to produce a result they wish were true or want to make true.]

Another common characteristic of pseudo-experts is that they know how to apply complex processes and techniques and have been well trained but do not understand the limits of those techniques. [Witness for example the folks who started the Iraq war who understood the incredible killing power of the US military but had no understanding of the inability of that killing power to convince people that occupation is good for them.  Or the Zionist Israelis who think that more death, more occupation, more siege, more brutality, etc. will succeed in cowing the Palestinians.  I am reminded of an interview 60 Minutes did years ago with some Israeli soldier who was heavily involved in the search for Hizbullah military ops man Imad Mughniyeh (assassinated not too long ago by unknown hands in Damascus).  The Israeli was talking all about the snippets they knew about his life, recounting a typical tale of Palestinian suffering at Israel's hands from his family's ethnic cleansing in 1948, the misery of the refugee camps, etc.  When they asked this Israeli after all that what made Mughniyeh so determined to fight Israel, he just threw his hands up and said "it's unfathomable, we have no idea, he's just crazy".  I mean, the idiotic bald-faced nature of his stupidity was incredible.  He just recounted all the brutality Israel visited on this man, and then had the temerity (or stupidity driven by belief in his own Zionist propaganda) to claim that there was no fathomable human reason for Mughniyeh's rage.  Classic example of knowledge, but no understanding.  This is one of the bedrocks of Zionism, US Middle East policy, and Imperialist policy towards those they colonize generally.]

In trading, a good example would be someone who can perform complex statistical analyses of trades, runs a simulation that generates 1,000 trades, and then assumes that she can draw conclusions from those trades without regard for the fact that they might have been drawn from only two weeks of short-term data. These people can do the math but do not understand that the math does not matter if next week is radically different from the last two weeks. [To use an example closer to the heart of this blog, all the pseudo-experts who think that looking at militant movements in the Middle East since Sep 11, 2001 ("9/11 changed everything" rubbish) or perhaps go back a couple decades at most somehow makes them qualified to talk about or worse yet make US policy for the Middle East.  You can often easily spot these quacks because they will talk about "anti-Americanism" as if it were a unified ideology rather than a diverse array of symptoms in reaction to a diverse array of bad policies and actions.]

Don't confuse experience with expertise or knowledge with wisdom.