In his recent post Using experts as an investment strategy Permjot Valia wrote:

I was impressed by a business which was in the area of film production. The management team were very strong and had been at the sharp end of production for a number of years. The business seemed to be worth backing. As I knew nothing of the business area, I asked a good friend of mine who is an expert in this field to give me his opinion; it was revealing. He was able to show me why this model simply could not return a profit. Needless to say, I declined to invest. This ten minute conversation saved me a lot of money and it is worth getting this sanity check.

While I generally agree with him I also don’t believe in placing unquestioning trust in experts. You see the trouble with experts is they know what can and cannot be done. In contrast novices, amateurs and many entrepreneurs don’t have any experience let alone expertise in the field they are targeting. Now in many cases that shows – just look at some of the silly pitches on Dragons’ Den, but in other cases that lack of expertise is a blessing, it means they have no pre conceptions about what can and cannot be done, so instead of pontificating on why an idea cannot be executed they just get on and do it.

In short sometimes being an expert can trap you in the box, whereas those without expertise and thinking outside the box by default.

Experts can be wrong too, apparently one once said:

Groups with Guitars on their way out.

To explain why he chose not to sign up the Beatles when he had the chance. That was a costly business decision. Equally IBM are famed for being experts on the computer market and having completely misjudged it handing over the market dominance to others in the process.

In short ask an expert opinion, but don’t be afraid to use your own judgement too, the expert might just be missing something.

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