October 25, 2011

What You Should Know about Financial Gurus

You're watching TV and you see an interview with a financial expert who is predicting that the real estate market will go up or down or that gold will rise or fall.    Maybe you should go buy / sell the asset in question.    If that guru on TV says its going up/down then who are we mere mortals to question them? 

Sometimes the gurus on TV may know what they are talking about.   But more often than not they are just voicing their own opinion and in the worst case they may be biased and trying to pitch a product they themselves have a vested interest in selling.

Its hard to know who these gurus, financial experts, economists, etc. that get interviewed as experts on TV actually are.   The TV segment just gives them a credit as an expert then asks them their opinions.   There is no resume and there are usually few if any credentials cited.   They are labeled an expert and we're supposed to trust this because the TV said so.

Well I have one  solution for this. ...   You can read about many of these experts and find out about some of their biases and track records on Eric Tyson's website in a section he calls the guru watch.

Some examples of Eric's work from the guru watch...

Have you just caught an interview with economist Robert Prechter declaring we're heading for a depression?   Check out :  Robert Prechter's track record

Did you read an article about Peter Schiff declaring that the US real estate market is going to see significant losses in the next few years?   Find out about how wrong Schiff's been even though he says “...I Don't Think I've Been Wrong on Anything”'

Is Glenn Beck insisting that gold is a great buy and suggesting you stay tuned for more of his wonderful theories after you hear a brief message from a Goldline?    See if you should listen to Beck's financial advice.

If you're a Dave Ramsey fan then you may have heard of his Endorsed Local Providers.    Find out why you should avoid them.

Ok, so you may be asking yourself:  "who's this Eric Tyson guy and why should we trust him?"    Thats a pretty good question you have there.   Eric Tyson is a well known author of several books.   He has an MBA from Stanford and several other impressive credentials.   But that doesn't matter that much.   The point is that he's collected information on the gurus.   That information is generally public and can be independently verified.   He is providing information about the experts that is useful in itself.   The source doesn't really matter so much since its stuff you could verify elsewhere.   Tyson just collected the information for us.    I do trust Tyson though.   I've read some of his books (Investing for Dummies is one good one).  He knows his stuff and he talks a lot of sense.

So next time you see an expert on TV making predictions about the economy or recommending that we all buy or sell one asset or another, first check out Eric Tyson's guru watch

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