Leveraging Logical Fallacy

An analyst or firm having their name appear in the trade press, on websites and/or industry events lends them a veneer of credibility that provides tremendous returns. Why? Applying a variation of the logical fallacy the appeal to authority, having one’s name out there or research quoted establishes an entity as an expert in the minds of many regardless of whether or not they are any good at what they do.

When a market is in its formulation stages anyone who is presented as a visionary, prognosticator or market watcher is more likely to be esteemed as someone worth listening to. The more times the name appears the more credibility is assigned. This phenomena varies across sectors but is very strong where analysts are seen as influencers and/or market validators.

Now anyone with any common sense will not automatically accept the latest market predication they see but unfortunately skepticism remains in short supply especially with an audience eager for perspectives that mirror their own (also known as confirmation bias). So, when someone can reflect current thinking/desires their cash returns are going to increase…at least in the short term.

So how do you capitalize?