“Never ask the barber if you need a haircut” is a popular saying from legendary investor, Warren Buffett.
When making decisions, it’s natural to look to the advice, experience, and expertise of others to help us form our judgements.
But we should remember to scrutinise both 1) the advice itself, and 2) the credibility of the advice giver.
We often forget number 2 and treat all advice equally.
In the case of the barber, it’s easy to see the connection between the “you should get a hair cut” recommendation and the barber’s monthly pay check.
However, in most situations, the conflict of interest is not so clear cut. But simply being aware of it can help improve the quality of our decision making.