Successful money managers are hugely pensive, introspective, and meditative on their mistakes (because they all make them, even the great ones, and with frequency). They stew and mull them, contemplate them, never forget them. They know their mistakes inside and out. So I'm always on the lookout for books that help identify wrongness of all kinds, searching for a better understanding about why and how it happens.
So I was excited, but ultimately disappointed, with David H. Freedman's Wrong. Or, the full title, Wrong: Why experts* keep failing us—and how to know when not to trust them *Scientists, finance wizards, doctors, relationship gurus, celebrity CEOs, ... consultants, health officials and more. It's a pyrotechnics show of all the stuff so-called experts flub on, but not much else. Disappointed, because I've otherwise enjoyed Freedman's work (Brainmakers: How Scientists Are Moving Beyond Computers to Create a Rival to the Human Brain was a fun book!).
I was hoping for a thoughtful, multidisciplinary book positing a coherent view of how and why folks who are considered experts tend to be wrong in their prognostications. Instead, it's a relentless showcase of examples where experts are wrong (which is very often), but you never really learn why at the cognitive level it actually happens. The book just keeps saying (over and over) stuff like, "This study was wrong! It turns out cell phones don't cause cancer…or, maybe they do!" But what group of readers needed to be told fitness and financial gurus, or breathless studies about cell phones, are dubious?
In sum, the book functions more like an updated and cluttered How to Lie With Statistics. Most of it deals with how studies and findings get distorted and how wrong predictions or findings actually come to be. Freedman fills many pages with discussion not really germane to the book's topic, saying, for instance, that Google and other internet filters/search engines aren't good "experts" at helping us find what we're looking for. (But who regards Google as an "expert," and what does this have to do with "why human experts keep failing us"? My favorite example was a rant about how Netflix doesn't recommend movies Freedman likes.) It's bizarre, and one gets the feeling such topics were added simply to give the book a little heft. Why not burn a chapter or two about those few experts who do get things right? What characteristics do they share, and why, and what makes them different?
Even the "knowing when to trust them [experts]" part is trite, filled with a loose amalgam of advice that doesn't add up to anything practical. For instance, saying to avoid advice from gurus that involves "steps," or is overly "simple," or is too "easy" to execute, or "confirms what people already thought," and so on. But plenty of the best advice is heuristic-based, easily actionable, and simple. Like, the easiest way to increase savings is to make sure savings is the first thing to come out of your paycheck (most folks tend to make their savings a residual from the month's expenses). This is a great little heuristic that came from tons of behavioral finance studies by experts in the field.
Some bright spots? The second appendix, buried at the end of the book, is a short history of wrong-headed experts—from the Pharaohs and Aristotle all the way to NASA—which was fun to read. Also, a full chapter diatribe on the biases and distortions in the academic world is worthwhile and will make you think twice before you trust a tenured professor again. The book also astutely observes that retroactive advice is always in high supply. It's amazing how many "experts" came out of nowhere telling us how bad things were after the financial crisis hit. No sign of most of them beforehand.
Simply, and with all due respect to Freedman as a journalist, this book might have been better left to, well, experts. He seems to avoid stuff like the nitty gritty of financial markets prediction because he doesn't fully grasp how it works. (It's particularly telling that after so much text about the foibles of academic science, Freedman is mum on global warming—the ultimate of all expert scientific prognostications.) Also, Freedman goes into some detail about whether we can trust "the wisdom of crowds" (a la James Surowiecki's bestseller), but he constantly misunderstands the differences between crowds and markets. Markets pit opinions against each other in a forum where prices provide information (there are always two parties in each trade who agree on a price), but groups and committees working toward a shared goal is something entirely different. He tends to use these things interchangeably, or lumps them together too often.
Perhaps the most frustrating part about the book is its shallowness. There's little reflection, little weighing of the potential societal value of all these "wrong" opinions. Innovation, productivity gains, profitability, living standards—progress itself—is hugely dependent on a vast panoply of ideas, mixing and colliding, being tested and rejected or accepted by the public and other experts, and so on. There should always be many magnitudes more ideas than there are good ideas. Experts should often disagree and be wrong. And all that should be aired, freely, to whoever wants to listen. That's the world we progress in, not some orderly, precise world where experts are always right and we only ever do what ends up being the sensible thing—Darwin would be horrified.
Later this summer, I'll review Being Wrong: Adventures in the Margin of Error by Kathryn Schulz and Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin (one of my favorite financial authors), in search of some greater thoughtfulness on the topic of being wrong. In the meantime, you're better served skipping this one.