Today my 401k portfolio is worth about 50% less than it was a year ago. I don’t want to even estimate the value of my house but it is probably worth at least 20% less today than a year ago. A year ago the “wisdom of the crowd” way overvalued my net worth, today it way undervalues it – or at least I hope so, the crowd may still be fine tuning its “wisdom”.
Now, the law of averages and regression to the mean say that the crowd will end up pretty wise in the long run – but imagine making a decision based on the “wisdom of the crowd” at any individual point in time. In fact, what always happens is that when the crowd decides some course of action is wise (like taking out home loans you can’t afford or betting that the hot dice roller at the craps table will make that eight the hard way) it almost invariably turns out that the crowd was dead wrong – this is why contrarians have made good livings betting against the crowd.
Gartner’s hype cycle construct illustrates this effect very well. The hype cycle shows how wrong the wisdom of the crowd is most of the time.
Security is not immune to the “wisdom of the crowd” herd mentality, though the best security programs I’ve seen tend to be run by teams of people who have a strong cynical and contrarian streak. Ellen Messmer of Network World recently wrote a nice piece where she asked a number of security people about some popular security myths – take a look.
I leave you with yet another sports analogy (and yet another apology to those of you outside the US who believe football is actually a game where you actually kick a ball with your foot): who is more wise: the football coach who kicks the field goal to tie the game, or the shouting crowd yelling for him to go for the touchdown to win? By wise I mean: who would you pay to make the right decision?
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