Whither Expert??

The bull market frenzy of the 6 months preceding mid-Jan of 2008 has given rise to a new species. In addition to the bulls and bears of the stock market, we had the curious spectacle of the emergence of the 'expert', popularised by the opium distributing CNBCs and NDTVs of this world. This 'expert' needed no skill, experience or achievement. All that was required was 1) an ability to follow the herd superlatively, like it had not been followed before and 2) massive doses of selective amnesia, to be able to forget what was said yesterday, and indeed contradict it with impunity.

Sample this - Mr A (who shall go un-named here) says on January 4 (nifty at ~6,100): the Nifty is poised to touch new highs. If it crosses 6300, the next target is 6700, to be reached within a couple of weeks. So far so good, the guy is entitled to his opinion. The self same Mr A says on Jan 23 (post nifty crash at ~5,000): the nifty is in a major downtrend. The next target for the nifty is 4000, which if violated, the index could go to 3,500. Duh! Dude, maybe you dont get it, but that is like forecasting yesterday today! Your opinion is not merely irrelevant, it is contradictory and self-defeating!!!

There are so many such examples that I could possibly not list out the entire bunch here. Having an honest opinion is fine - you could be wrong, but having an opinion that changes POST facto, based on the trend and what others are saying, is not only stupid, it is unethical. The reason such characters abound is driven by two factors - 1) the desire in our media to create 'celebrities' - we see it on the garish vernacular channels, where it is more in-your-face and 2) the lack of financial maturity in our markets. This is not surprising, given that most of us 'invest' based on tips from friends / colleagues or these 'experts'. Contrast this with developed markets, which, though driven by the same basic emotions of greed and fear, and much more evolved, measured and rational about the state of the economy.

I have hit upon a novel way to make money off these 'experts' advice - I promptly do the opposite of what they tout. Believe me, it works!! What a lot of retail investors dont get is that investing is a serious business, best handled by professionally qualified and experienced individuals. This is what enables the 'expert' to survive, and indeed thrive. I wish our market quickly learns this fact and stops the loss of its hard earned profits!! In the meantime, I look forward to profiting from their babbling prophecies.