Monday, March 3, 2014

Dowsing to find water and great investments


This headline caught my attention: “California farmers hire dowsers to find water.”  In turbulent times (droughts, financial emergencies) some will resort to almost anything, including pure quackery to find an answer.

For centuries, dowsers have used copper sticks or wooden rods that resemble large wishbones.  When the two rods or sticks cross one another, that marks the spot where they predict finding water underground.

Water dowsing or water witching has been used not only to find water but also to search for oil and metals.  In the 17th Century it was even used to track criminals and heretics in the South of France.

Dowsing sometimes works but every once in a while but so does a wild and uneducated guess. In study after study, dowsers have not lived up to their claims.  In the short term, a few get luckier than others.  But in the long run, results average about the same as a random guess. Remember that typically one out of 16 coin flippers will get the heads/tails call absolutely right 4 times in a row. 

Dowsing is pure superstition, a belief that one event leads to the cause of another without any scientific evidence linking the two events. The word superstition was first used in English in the 15th century, which was borrowed from the same word in French.

Water dowsing has a lot in common with some financial advice that one will hear in the investing and trading world.  Charlie found us a good location to drill our well (perhaps on land where it was hard to dig a dry well) compared to Charlie told us to buy Consolidated at $27 a share.  The credibility of the advice is almost always based on a small sample size (frequently a sample of just one).

Even though I don’t walk under ladders, never open an umbrella indoors, am careful to never break a mirror, and am always cheered when I find a penny or four leaf clovers, I try to put these thoughts aside when I have an important decision to make.  I prefer to rely on: 1) large data sets 2) empirical evidence and 3) logic – not superstition. 


John

No comments:

Post a Comment