No. of Recommendations: 2
You can also relate the Dunning-Kruger effect to Ben Graham's “In the short run, the market is a voting machine but in the long run, it is a weighing machine”.
I wonder what the consequences are when people who overestimate their own abilities make a career in business or politics.
By overestimating yourself, you can inspire others, sweep them along, find capital and supporters and expand your sphere of influence more and more (voting machine).
However, none of this changes the real abilities, only the opinions about them.
For example, I still can't build a new and great airplane just because I think I'm an outstanding aircraft engineer.
In the long term, the weighing machine will have to take control again and bring down "solutions" that don't work.
Until then, however, many resources will be directed in the wrong direction.
I ask myself the following questions
- how long can such dysfunctional systems be maintained? (probably for a very long time)
- will this lead to more frequent, longer and ever larger boom-bust cycles?
- can such mismatches between appearance and reality be recognized in time?
- can the resulting inefficiencies (price vs. value) on the stock market be exploited?
- is it enough for your own success if you can at least recognize the biggest impostors and stay away from them? (I hope so)
- am I overestimating my abilities in this respect? (very likely)
wopger
(translated from German into English with the help of deepl.com)
