Possibly the best book I read in 2016 couldn’t have been read at a better time as the year nears an end. I could relate with a lot of things as I work as an equity, business and economy analyst trying to do the seemingly impossible thing of forecasting stock prices, the slant of the economy and possible impacts/opportunities to businesses. In particular, the examples of how super forecasters go about doing their jobs were pretty inspiring. Examples of taking the outside view and creating a tree of various outcomes and breaking down that tree into branches are something I could benefit from.
This is a smart-thinking, more practical companion to Expert Political Judgment, useful for forecasts in politics, economics, and other areas of human activity, if not quite as compelling as its predecessor.
Super forecasting is a book that presents the results of Philip Tetlock’s research on prediction and avoiding the biases that afflict even experts’ forecasts within their domain of expertise. Superforcasting: The Art of Science and Prediction, by Philip E. Tetlock, is a book about the art and science of statistical prediction, and its everyday uses. Except it isn’t really, that is just what they are selling it as. The book starts off really strong, analyzing skepticism, illusions of statistical knowledge, and various types of bias. However, the majority of the book focuses on a US government intelligence project called IARPA, designed to use everyday citizens to make statistical predictions.
Old joke about American Intelligence and oxymorons aside, Mr. Tetlock draws heavy inspiration from American politics in the latest book detailing his life’s research. This is the person behind the quip about American forecasters being worse than “chimps with darts”, a line he’s sick of hearing but that’s not inaccurate.
I was one-hundred percent, absolutely blown away by this book. I think it is because it contained so many truths that I, a project-based learning facilitator in business development, preach to my protégé. Mentees have to be able to accurately forecast whether their project will be successful and make changes if it won’t be. How do they do that? They need to know what is known and unknown. They also need grit, determination, and a growth mindset. They also need to be able to work together in synergies and teams.
Even if you didn’t know much about forecasting before reading this book, and you will find the explanations easy to follow. The ease with which the superforecasters’ predictions were explained, however, took some of the magic out of the ability to consistently beat others’ forecasts. Yet tips not to over- or under-predict simultaneously make the superforecasters’ feats seem even more out of reach.
Sometimes it could feel like it was all common sense and/or things you already familiar with: cognitive biases, scientific method, falsifiable predictions, regression to the mean, growth mindset, self critical, wisdom of crowds, thinking in gray, groupthink, grit etc. If you are familiar with these ideas, you will even gain much from reading the book as it enhances your knowledge of the use of stats and basic ideas behind thinking fast and slow.
This enhances your ability to think clearly. The short-short version of the forecasting formula is “use probabilities and check your ego.” it elaborates on this, and teaches how to use probabilities and when and how to check your ego. Perhaps more importantly, it will help you spot others’ errors and see through their predictions.
This article will be concluded in our next week publication. You can contact me for business advisory services and training – send me a message via WhatsApp or SMS.
– Nwaodu Lawrence Chukwuemeka (Ideas Exchange Consulting).
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