I find it fascinating that a jet full of passengers can just disappear. As time passes, it is becoming more and more evident that this is not going to end well. What is interesting to me, however, is the media coverage of the event. Everyone seems to have a theory as to what happened (including one ‘reporter’ speculating that a black hole might have sucked them up). The problem? Most of these theories are based on no more than a hunch. There is little to no evidence supporting most of the ideas that the pundits on TV are espousing.
Now Dustin, are you really going to make a comparison between the Malaysian 777 disappearance and appraising? Of course not. But, I am going to make a comparison between the media coverage of the missing 777 and appraising.
Appraising, like journalism, is not an exact science. If it were, you would see a different group of people becoming appraisers. It is not just math. It is not physics. It is not engineering. It is not as simple as calculating 2 + 2. Rather, it is interpretation and analysis of data. Sometimes, however, I fear that some forget the ‘data’ part of that sentence. Just as the so-called journalists who pontificate on what ‘might have happened’ to the plane are often merely guessing, appraisers might be tempted to do the same thing. This is a mistake. It diminishes your level of professionalism and that of the entire industry.
Do not misunderstand. I am not saying that there is never a place for minor subjectivism (otherwise, we could just get computers to report values). There are times when that is unavoidable, but it should always be backed with as much evidence as can be found. I am referring here rather to guess-work because it can be easier to do than real research. The temptation comes when the first (and usual) approach does not pan out. For example, you can’t find comps to support that waterfront adjustment, so you just lick your finger, put it in the air, and come up with a number. Is it possible that there are more approaches to valuation than just comparable sale analysis? If you cannot find waterfront comps, what is the next step, the step after that and then the step after that?
Was that flight hijacked? Did it crash into the ocean? Is it currently hiding in a hanger somewhere with over 200 hostages? We do not yet know, but there are plenty of guesses on any news channel you turn on. Let’s not let the journalism of speculation be the model for professional appraising.
Now, go create some value!