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"Pundits' predictions are not only wrong but egregiously wrong..."

Recently Mark and I noted with some amazement a column by Paul Farrell, MarketWatch's resident bear and all-purpose curmudgeon. For years we'd read his columns with a shake of the head over his pessimism and cynicism. So we were both rather shocked to read his "6 reasons I'm calling a bottom and a new bull" article. Farrell turning bullish? This is "man bites dog" material.

I don't know, of course, if his new bullish stance will prove correct. But I do agree, for the most part, with his six points. I especially thought it worth sharing from his fourth point — "Famous media-darling pundits inevitably flameout." This is something we have pointed out over the years, and Farrell backs it up with some stats from a recent study.

A month ago Newsweek's science columnist and former Wall Street Journal legend Sharon Begley wrote a fascinating piece, "Why Pundits Get Things Wrong." Her opening: "Pointing out how often pundits' predictions are not only wrong but egregiously wrong ... is like shooting fish in a barrel, except in this case the fish refuse to die. No matter how often they miss the mark, pundits just won't shut up."

Think of all the media darlings you know as Begley reviews the data: And "the fact that being chronically, 180-degrees wrong does not disqualify pundits is in large part the media's fault: cable news, talk radio and the blogosphere need all the punditry they can rustle up, track records be damned."

The data comes from Philip Tetlock, a research psychologist at Stanford University: "Tetlock's ongoing study of 82,361 predictions by 284 pundits" concludes that their accuracy has nothing to do with credentials such as a doctorate in economics or political science, or on "policy experience, access to classified information, or being a realist or neocon, liberal or conservative."

What matters? "The best predictor, in a backward sort of way, was fame: the more feted by the media, the worse a pundit's accuracy. ... The media's preferred pundits are forceful, confident and decisive, not tentative and balanced. ... Bold, decisive assertions make better sound bites; bombast, swagger and certainty make for better TV."

They can be totally wrong, so long as they're assertive and entertaining. "The marketplace of ideas does not punish poor punditry. Few of us even remember who got what wrong. We are instead impressed by credentials, affiliation, fame and even looks — traits that have no bearing on a pundit's accuracy."

The facts confirm that taking your investing lead, or your emotional disposition, from the experts on CNBC and other financial channels, is to invite disappointment.

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