Forecast with Finesse

By: Nate Silver

Prediction is indispensable to our lives. Every time we choose a route to work, decide whether to go on a second date or save money for a rainy day, we are making a forecast about how the future will proceed — how our plans will affect the odds for a favourable outcome.

Not all of these day-to-day problems require strenuous thought; we can budget only so much time to each decision. Still, you are making predictions many times every day, whether or not you realise it.

For this reason, this book views prediction as a shared enterprise rather than as a function that a select group of experts or practitioners perform. It is amusing to poke fun at the experts when their predictions fail.

However, we should be careful with our Schadenfreude. To say our predictions are no worse than the experts’ is to damn ourselves with some awfully faint praise. Prediction does play a particularly important role in science, however.

You may be uncomfortable with a premise that I have been hinting at: we can never make perfectly objective predictions. They will always be tainted by our subjective point of view.

This book asserts that a belief in the objective truth — and a commitment to pursuing it — is the first prerequisite of better predictions. The forecaster’s next commitment is to realise that she perceives it imperfectly. Prediction is important because it connects subjective and objective reality.

From “The Signal and the Noise Why So Many Predictions Fail — But Some Don’t”