Friday, August 1, 2008

Dan Gardner . I predict your prediction is wrong

We love* the Ottawa Citizen. From the OC:

So it's August and oil has soared to yet another record high. Expect it to hit $200 a barrel soon.

Or at least, that was what experts told us a couple of months ago. Then the price dropped. And dropped some more.

Huh. Who predicted that?

Well, a couple of months ago I wrote that "the experts have been wrong before. They may be wrong again." So you could say I predicted it, although what I really predicted was that the predictions could be wrong. And that's about the safest prediction anyone can make.

We are bad at predictions. All of us. Laypeople are clueless, not surprisingly. But experts are no better.

Over the course of 20 years, Philip Tetlock, a University of California psychologist, followed the prognostications of esteemed political scientists, economists, journalists and others whose work involved "commenting or offering advice on political or economic trends." In all, Tetlock's experts made 82,361 predictions. They were appallingly inaccurate. Tetlock discovered a flipped coin would have done better....MORE

We touched on the phenomena in "First Solar: Analysts Target $350 to $450 Before Earnings (FSLR)"

....That $450 figure has a whiff of December '99 about it. Picking a target price is more art than science with the default being projection of the current trend....

Yes, we read the academic stuff, mainly so you don't have to. And not just Proceedings A of the Royal Society or Philosophical Transactions of the Royal Society A. No, we venture into academentia:

From: "Too many choices -- good or bad -- can be mentally exhausting"

...Sure, the Journal of Personality... has high standards but can they match the rigor of my fav.:

Journal of Leisure Research
The Journal of Leisure Research is devoted to original investigations that contribute new knowledge and understanding to the field of leisure studies. ...
See also: "The Masters and Climate Change".

*The O.C. had the best retraction/apology EVER:
...And a reprise of one of my favorites; from the Ottawa Citizen:

“The Ottawa Citizen and Southam News wish to apologize for our apology to Mark Steyn, published October 22nd.

In correcting the incorrect statements about Mr. Steyn, published October 15th, we incorrectly published the incorrect correction.

We accept and regret that our original regrets were unacceptable, and we apologize to Mr. Steyn for any previous distress caused by our previous apology.”

HT: Jay Leno

Come on folks, it's not rocket surgery.