(Recommend, Would not read again)
The book could be easily summarized in less than 20 pages, as it’s incredibly repetitive and tends to go off-topic at times. However, there are valuable insights that could be gained from it.
This book promises to teach its readers the skill of forecasting.
Forecasting has a limited range, however, that does not mean that is impossible or useless to make forecasts. You need to pick your fights wisely and choose topics where hard work is likely to pay off. The main point of the book is that you can’t be a good forecaster and improve your skills unless you have a way to measure the success of your forecasts. To be a good forecaster you need to have good numerical skills, reasonably high intelligence, to follow the news often and the strongest predictor of performance seems to be commitment to self-improvement.
Measure the success of your forecasts
“Humans are too quick to make up their minds and too slow to change them. Take a look at the history of medicine (bloodletting is a good example of a stupid practice) and its lack of statistics and experimental approach. We need to measure forecasts success, be willing to revise forecasts, learn from mistakes and be more scientific in making our forecasts. Don’t rely on intuition only.”
“The compulsion to explain arises with clocklike regularity every time a stock market closes and a journalist says something like ‘The Dow rose ninety-five points today on news that…’ A quick check will often reveal that the news that supposedly drove the market came out well after the market had risen… the journalist conjures a plausible story from whatever is at hand. The explanatory urge is mostly a good thing. Indeed, it is the propulsive force behind all human efforts to comprehend reality. The problem is that we move too fast from confusion and uncertainty to a clear and confident conclusion without spending any time in between.”
Set up a clear time frame of your forecasts and use specific language (66% chance of something to happen within the next 3 months).
The forecasting experiment showed that what made forecasters successful was how they thought. There are Big Idea thinkers who focus on one thing and there are thinkers that rely on many analytical tools and many ideas. The first group was always certain in their forecasts, second one was much more flexible. Foxes / Hedgehogs. Know many things / know only one big thing.
“Aggregate the judgments of many people who know a lot about lots of different things”
“Stepping outside ourselves and really getting a different view of reality is a struggle. But foxes are likelier to give it a try. Whether by virtue of temperament or habit or conscious effort, they tend to engage in the hard work of consulting other perspectives.”
“Need for cognition, openness to experience, cognitive reflection are predictors of forecasting success.”
“Active open-mindedness: People should take into consideration evidence that goes against their beliefs. It is more useful to pay attention to those who disagree with you than to pay attention to those who agree.”
“For superforecasters, beliefs are hypothesis to be tested, not treasures to be guarded.”
“Why me? When something unlikely and important happens it’s deeply human to ask ‘Why’?… The better a person is at forecasting the less likely is he to believe in faith.”
“Unpack the question into components. Distinguish as sharply as you can between the known and unknown and leave no assumptions unscrutinised. Adopt the outside view and put the problem into a comparative perspective that downplays its uniqueness and treats it as a special of a wider class of phenomena. Then adopt the inside view that plays up the uniqueness of the problem. Also explore the similarities and differences between your views and those of others – and play special attention to prediction markets and other methods of extracting wisdom from crowds. Synthesize all these different views into a single vision as acute as that of a dragonfly. Finally, express your judgment as precisely as you can, using a finely grained scale of probability.”
Be careful not to underreact or overreact to new information.
Growth mindset and grit. Practice, fail, learn from failure, and become better.
“Research shows that judgment calibrated in one context transfers poorly, if at all, to another. So if you were thinking of becoming a better political or business forecaster by playing bridge, forget it. Repetition and good feedback make a good forecaster.”
“Good forecasters are a perpetual beta, never complete, always changing their views.”
“Forecasters tend to be: cautious (nothing is certain), humble (reality is infinitely complex), nondeterministic, actively open-minded, intelligent and knowledgeable with a need for cognition, reflective, numerate, pragmatic, analytical, value diverse views, probabilistic, thoughtful updaters, good intuitive psychologists, growth mindest, grit. Strongest predictor appears to be belief updating and self-improvement, roughly 3 times as powerful predictor as intelligence.”
‘Victims of Groupthink’
“Members of any small cohesive group tent to maintain esprit de corps by unconsciously developing a number of shared illusions and related norms that interfere with critical thinking and reality testing. Good forecasters must be aware of how the people around them might affect their views.”
- Focus on questions where your hard work is likely to pay off.
- Break problems into smaller problems.
- Strike the right balance between inside and outside views.
- Strike the right balance between under and overreacting to evidence.
- Look for the clashing causal force at work in each problem.