RJH writes...

My youngest son, two, is ill. He's been in hospital for five days; he's suffered a battery of blood tests; he's exhausted from seven days of constant fever; he's unable to eat without pain, so does not; he's on two drips; he's lost over 6% of his body-weight; and is still having more blood tests. Yet, pre-hospital, he had already seen three doctors, all of whom diagnosed him with reassuring certainty, but none correctly.

How curiously similar this medical compulsion for certainty is to that frequently manifested by market experts. Financial journalists daily offer up to audiences the old saw "markets hate uncertainty" and summon experts to diagnose matters. And, lo, the duck-call scarcely warbled but the sky darkens as the experts touch down, waddle up to the mike and - the bulk of the flock anyway - quack their way through a few eminently forgettable minutes of air-time.

Now, some of the quacking is entertaining; some informative; some thought-provoking; and so on. But not one of the experts wants to appear indecisive: after all, they are selling - either their reputation, or their service, or both. That bias is built-in, and it is exceedingly rare that it does not get in the way of the expert. The result? Frequently under-thought, but reassuringly orthodox and confident, quack-bites.

Where the notion of an alternative hypothesis is admitted by an expert its probability is frequently lightly-weighted by the language of presentation: "barring a force majeure event", "there are always unknowables", "historically unlikely" and that old reliable "on current trends". Sometimes the speaker utters these as a warning (good); but more often as reassurance (not good).

Difficult, then, to escape the conclusion that many experts are more interested in covering themselves and attracting clientele than in admitting to any ignorance. On the rare occasions there does appear an expert prepared to use the vastly under-rated words "I don't know, but here are the probabilities", we should listen carefully: those who recognise their own fallibility reveal open minds and a willingness to both study and learn.

So there it is. Markets may love certainty, but uncertainty is all they have. "The market will fluctuate" was the extent of JP Morgan's classic market diagnosis and it's still valid. The rest is research, an open mind, probability and cutting losses early when the plan goes awry.

Tell your doctors. Please.

The confluence in this article of the words "doctor", "quack" and "expert" is obviously purely coincidental and implies nothing, although it may appear to. Seriously expert specialists exist in all fields. But they are thin on the ground.

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