So when you get business advice, you need to ask yourself: What evidence does she have for that advice, and are her circumstances relevant enough to mine? The same is true when a friend swears by some particular remedy for acne, or migraines, or cancer. Is he repeating a recommendation made by multiple doctors? Or did he try it once and get better? What kind of evidence is reliable?

I think you missed the most common and obvious failure mode: when people try something lots of times and never succeed.

A distressingly large portion of the population thinks that repeatedly trying and failing at something makes them experts. It's so universal as to be cliche: the person with pimples who knows all about how to get rid of acne, the person who's been divorced five times who gives advice on how to build a good relationship, the overweight person who's an expert on diet and fitness, etc. And they aren't just giving advice on what doesn't work. It's true that experience counts for a lot, but it does not trump results.

It would be understandable if it were just people deluding themselves; it seems normal that there should be a strong self serving bias to protect our ego. Yet people continue to take advice from those who are the least qualified to give it.