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Jonathan Pain has a reputation for being right about the right things. He called the Tech bubble in 2000 when nobody else was alarmed. He rang warning bells about the USA property bubble in 2008 long before everybody suddenly got smart after the event. In 2016 he called a Trump victory mere days beforehand when he was a lone voice against every expert in the field.
Everybody said Trump would lose. From the pundits to the man in the street.
If one is an expert whose reputation is based on forecasts, imagine the pressure to conform to the massed opinion of elites that Trump would fail? Are you really going to disagree with opinions commonly held by Prime Ministers, Investment Fund managers and the most prestigious publications in the western world?
If you earn your living predicting things, your reputation is vulnerable since it is something you can lose. You don’t want to be someone who was alone in predicting, for example, the tech bubble in 2000 or the US property bubble in 2008. Even if you think the other experts are all wrong, why risk publishing a view that could wreck your reputation? If you go with the flow, then your view will be no worse than your competitors’, and that could be a most forgivable error.
Such an expert must form a view that is independent of the prevailing view. From the same set of raw information from opinion polls, traditional and social media, this person must see and report what others are not seeing. What combination of characteristics drives one to take such a risk? In short, with the stakes so high, why stand out?
Perhaps the first characteristic is intellectual integrity and a curiosity that takes the form of an almost unhealthy fascination with truth, even when you don’t like what you see. In the case of Jonathan Pain, he certainly felt uncomfortable with the prospect of a Trump win. He was not calling his favorite.
The second characteristic becomes essential and that is courage: to be prepared to lose everything in support of that truth.
Image shows Mensa Conference MC (l) and Jonathan Pain (r)
Jonathan Pain took action when he published his view on the 5th November in ‘The Weekly Pain Report’, www.thepainreport.com.au. Being an independent economist helps thinking processes to be clear and uncontaminated by any interests of an employer. Independence alone is not enough. What other characteristics are required?
Most of the media was drenched in what it and its readers wanted to hear; it was an echo chamber.
Characteristic three, then, is a critical faculty to identify and block out the echo. Or perhaps this is better described as being detuned to opinion that is given without underlying evidence, especially when that opinion is repeated.
It takes long hours interspersed between the duties of a typical expert, the continual blur of travel, speeches, appearances on news channels, investment boards, writing, and the research required to support these, to look deeply into the information behind the information: who is being surveyed; what are the more revealing questions they are being asked? One such revealing question was “which way do you think your neighbor will vote?” How this was answered raised alarm bells. Then if the ‘normal’ information channels are not giving satisfaction, where else to look? Social media is the new normal: how many responses were there to tweets and blogs on each side of the debate. Again there were tell tales to see if you looked intelligently. Of course Bloomberg supercharges the rate of research, but many other experts had access to Bloomberg too but only saw the same things that made them wrong.
Characteristic four, therefore, is energy, and closely following is the underpinning characteristic, number five, of loving what you do.
This instance is almost a case study of how one expert swam against the current and came to their own correct conclusions. Such people add value to our lives as we can see what it takes to stand out.
Why should we seek such people out? To find the truth sooner rather than later. What can we learn from this that can be useful to us in our daily lives? A prescription for living of integrity, courage, a critical faculty, energy, and loving what you do. Just the usual prescription for a good life, taken together once every day, with or without meals.
One last fun fact for the political obsessives, Jonathan Pain was not the only expert to call a Trump win. Michael Moore also predicted a Trump win, but as you know he is most certainly not part of the Wall Street fraternity or US think tank community or The New York Times/FT/The Economist/Huffington Post or professional political pundits network.
This was recognised in a NZ publication that commented...
|“In fact, the only 2 people I saw predict in print the Trump win were Michael Moore (international left wing film producer, raconteur and general grumpy guy of Michigan) and my good friend Jonathan Pain who near as dammit got the EC vote bang on.”|
15th November 2015