Are you impressed?

The experts don't impress me. They didn't when 98% of stocks had "buy" ratings (which we now know was often to influence sales), and they didn't when we were told this fall that stocks are a bargain. Experts have too much reputation at stake, and too many friends in high places.

For instance, when gold was in the $800's an ounce range, most experts predicted it would go up this year but few offered a target higher than $1,050. Meanwhile the non-experts I read were predicting $1,500 to $10,000. Those are outrageous targets. If an expert goes that high and it doesn't come to pass, he or she will look like a fool. But, if the expert calls $1,050 and gold goes to, say, $2,000, the expert can say they called it, but didn't go high enough. Now they are still a genius.

Philip Tetlock has some similar views of experts. The professor of organizational behavior at the University of California was interviewed for a CNN article titled: Why the experts missed the crash. So why was it, Professor Tetlock?

Greed and arrogance.

Wow. Who would have thought.

The websites I follow largely belong to people in the business who offer the insider opinion. Listening to these folks, I moved out of equities in December/January and into mining stocks. Maybe I just got lucky this time around, but my 401k recovered 40% of what it lost from its peak in 2007, and did it in about 7 weeks.

Not everybody with a blog deserves to have you listen to their advice. Tell us, professor, what do we look for?

"The better forecasters were . . . self-critical, eclectic thinkers who were willing to update their beliefs when faced with contrary evidence, were doubtful of grand schemes and were rather modest about their predictive ability."

"The less successful forecasters . . . tended to have one big, beautiful idea that they loved to stretch, sometimes to the breaking point. They tended to be articulate and very persuasive as to why their idea explained everything."

To our detriment, it's the second type of forecaster that the media likes to quote.

Tetlock said he likes Mark Zandi (Economy.com), and Larry Summers (head of the National Economic Council. I'll be looking these guys up.

And by the way, we should all temper our own enthusiasm when we pick investments so that we ourselves don't fall into the less successful forecaster group.