At PunditTracker, we place extra weight on second acts: people who demonstrate repeated success in different environments. Examples include former Apple CEO Steve Jobs and NFL coach Bill Parcells.
Just as half-truths are more dangerous than outright lies, the most dangerous pundit is the one who parlays a single correct call into guru status. While the media plays a central role in this game, our brains are culpable as well. Behavioral studies reveal that certain types of information have an outsized grip on our memory, including that which is recent, vivid, and unusual. This explains why we: (1) buy earthquake insurance after a (recent) earthquake, (2) believe that more people die from homicide (vivid) than from stomach cancer, (3) complain that we always get stuck in the slowest-moving line (unusual) at the grocery store.
The pundit playbook fully exploits this dynamic. To understand how, let’s place ourselves in the shoes of a pundit. What is the best way to make a call that meets all three criteria: recent, vivid, and unusual? Well, recent is easy—just make a lot of calls. That way, there will always be a fresh one out there. And vivid is just another word for bold. So if we make bold calls frequently, we are two-thirds of the way there. But how about unusual?
The beauty of the pundit playbook is that unusual takes care of itself. Bold calls are typically incorrect, so the correct ones are by definition unusual. Said differently, bold calls that turn out wrong are less likely to be remembered because they fail to meet the unusual threshold. Pundits are therefore entirely incentivized to churn out brash predictions, knowing that only the correct ones will stick in our mind. And because we tend to confuse ease of recall with frequency, we develop a warped sense of the pundit’s batting average.
This phenomenon is found in all walks of life, including sports. NBA guard Chauncey Billups, for instance, has been dubbed “Mr. Big Shot,” presumably because he has hit many clutch shots in his career. A closer look at the numbers, however, suggests that Billups’ nickname might be undeserved. Data from 82games.com reveals that Billups’ game-winning shot percentage between 2003 and 2008 was a paltry 16% (6 for 37), well below his 42% overall career shooting average. Our hunch is that a few of those game-winners were in high-profile, nationally televised games (vivid), thus sticking in the public’s mind and inflating Billups’ reputation as a clutch shooter.
The real danger comes when actions are taken based on a false premise. In this case, Billups’ inflated reputation is likely to garner him most of his team’s game-winning shot attempts, even though other players would be better options. Teammate Carmelo Anthony, for instance, had a sterling 48% game-winning shot percentage (13 for 27) over the same timeframe.
As anyone in marketing knows, once established, associations are very sticky. This explains how pundits are able to cash in for many years on the “one big call” they got right, despite sporting a terrible track record both before and afterwards. By playing the role of public scorekeeper, we hope that surfacing the data for everyone to see will help expose the one-hit wonders.
- Should we pay any attention to the 2014 S&P 500 forecasts? | Pundits and Predictions Blog | PunditTracker
- The Bermuda Triangle of Punditry | Pundits & Predictions Blog | PunditTracker
- Why The Prediction Industry Must Be Disrupted | PunditTracker Blog
- Let’s hear some examples | PunditTracker
- Broken Clocks | PunditTracker