In research described in Prof. Dan Arieli's "Predictably Irrational", it was found that people follow the advice of financial advisors based on their self-confidence, not on their results - in fact, sometimes contrary to their results.
Volunteers were more likely to buy advice from confident advisers (such as the 100% adviser from above) than those who spread out their percentages. What’s more, this tendency led advisors to make their advice more and more precise in subsequent rounds – but not more accurate.Watch it now:
These findings are troublesome. Because though confidence and accuracy sometimes go hand-in-hand, they don’t necessarily do so. And when we want confident advisors, some will exaggerate to give us what we want. Maybe this is why so many pundits on TV for example exaggerate their certainty? (our emphasis - KYI)
How does one appear more self-confident? Perhaps by repeatedly addressing the interviewer using her first name, as does TheStreet's Mr. Insanata. Perhaps by framing one's predictions with clear, round numbers. Disclosure: I used to publish my columns in a print publication co-owned by TheStreet myself, though I never met Mr. Insanata or his editors.