A pundit is someone who is an authority on a subject (or even purports to be an authority) and who expresses an opinion, especially in the media. The term “pundit” is tossed around in the financial media freely, and is applied to an expert in any subject from stocks and bonds to economics and global strategy, says Michael Shmidt for Investopedia.
Pundits fall into a range of types, including:
- Economic pundits. While qualifications vary, most have backgrounds in economics. Some of these pundits work for large investment companies, some write newsletters, and others double as strategists. They collect data, and prepare long- and short-term forecasts.
- Market pundits. Market pundits typically provide their opinions on what is currently happening in the market, though some offer future outlooks. They are predictors rather then forecasters and are generally wrong.
- Stock pundits. Prior to the passing of SOX, Sarbanes-Oxley Act of 2002, publicly-held companies, the investment banks that they retained and the stock analysts who covered them had a much more open relationship. The stock analysis field was changed forever by this, and the majority of data used is fundamental.
There is no way to tell if a pundit is right or wrong, or whether there is any accuracy or method to measure it. The best thing to remember is that markets and the economy are hard to predict, unless you have a crystal ball. Tune out the outside noise, and media, and have a straegy of your own in which you listen to what the markets tell you, instead of what the TV is telling you.