The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network TIP146: Superforecasting - The Art and Science of Predicting (Business Podcast)
Jul 8, 2017
Learn the right framework for making correct forecasts and how to prevent confirmation bias for your investments. Discover why financial experts are storytellers rather than forecasters and why the best investors constantly change their opinion. Explore the concept of superforecasting and the characteristics of successful superforecasters. Understand the challenges of forecasting and the importance of diverse perspectives. Dive into the analytical approach of superforecasters using algorithms and probability analysis. Discuss the difficulty of reflecting on previous forecasts and the dangers of group think. Also, learn about the benefits and features of the Enhanced American Express Business Gold Card.
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Forecast Skill Falls With Time
- Forecast accuracy declines as the prediction horizon lengthens and possibilities widen.
- Short-term forecasts (minutes/hours) are far more reliable than multi-year predictions.
A Small Group Outperforms Experts
- The Good Judgment Project found a measurable group of people who consistently outperform average forecasters.
- These "superforecasters" can beat typical intelligence-organization forecasts.
Authority Masks Knowledge Gaps
- Experts often suffer an illusion of knowledge and are accepted without enough skepticism.
- Authority can mask diagnostic errors and reduce questioning of assumptions.