Key Takeaways

  • Robert Kiyosaki, author of 'Rich Dad Poor Dad,' repeatedly failed in his market predictions, notably urging investors to “get out of US housing” in 2018, just before a historic boom.
  • Barry Ritholtz attributes this consistent inaccuracy to Wall Street's pervasive "humility problem," where many financial gurus pretend to reliably forecast the future despite the impossibility.
  • Sturgeon's Law—that '90% of everything is crap'—applies directly to financial advice. Ritholtz warns that most information seen on social media, Substack, and TV isn't worth a founder's time or effort.
  • Overconfidence in forecasting leads to significant errors and bad decisions, a fundamental flaw in how many in finance approach market commentary and advice.

The Guru Who Got It Wrong (Again and Again)

Barry Ritholtz doesn't mince words. He's had an “ongoing fight with Zero Hedge” and doesn't suffer bad financial advice gladly. For Ritholtz, few embody the problem more than Robert Kiyosaki, the 'Rich Dad Poor Dad' author. "Kiyosaki," Ritholtz states, “he's been he's a chapter in the book.” While the book itself wasn't Ritholtz's focus initially, his colleague Ben Carlson exposed Kiyosaki's dismal track record. Kiyosaki spent "the whole 2010s" being "super bearish," consistently advising to "sell sell equity, sell this, sell that."

The most glaring example? Ritholtz points to a “favorite tweet of his” from 2018: “get out of US housing, US single family home market. The financial crisis was the warning shot. Sell housing.” The irony is brutal. "Ironically," Ritholtz explains, "there has never been a better time in recent history to buy single family homes in the US." This wasn't an isolated miss; it was a pattern of confident, incorrect forecasts that could have cost followers a fortune.

The Humility Problem and Sturgeon's Law

Kiyosaki's repeated errors are a symptom of a larger, more systemic issue Ritholtz calls the "humility problem" in finance. “All of Wall Street, all of finance has a humility problem,” Ritholtz asserts. The core issue is simple: no one can reliably predict the future. Yet, a vast ecosystem of "gurus" and commentators built careers on definitive market calls that rarely pan out. These are the people, Ritholtz notes, who "don't get the invites to show up on the podcast" when they're wrong.

This isn't just about bad predictions; it's about the sheer volume of noise. Ritholtz invokes Sturgeon's Law, the principle that “90% of everything is crap,” and applies it directly to the finance world. “Most of the stuff you see in print on television on social media um on Substack most of the stuff isn't worth the time or effort to get it,” he warns. Overconfidence from those claiming foresight, coupled with the sheer volume of low-quality information, makes it nearly impossible for founders and investors to make sound decisions without a robust filter. The biggest mistakes, Ritholtz admits from personal experience, often stem from a lack of humility about what we truly know.

What to Do With This

Starting this week, identify the 3-5 financial "thought leaders" or information sources you regularly consume. For each, review their public forecasts from the past 12-24 months. If their predictions consistently missed or were overly confident without a track record, unfollow or mute them. Replace them with sources that openly discuss probabilities, admit error, and focus on process over definitive calls. Your mental bandwidth is too valuable for high-confidence, low-accuracy noise.