Okay so, every New Year’s people get all over the Internet and make their predictions for the following year – and we all know most of these predictions won’t amount to a hill of bean. And yet, some of them are so well hyped, seemingly so plausible that we can’t help but take notice, and even start considering how to prepare for such potential eventualities. Okay so, let’s discuss this phenomena shall we?
There was an interesting piece in the Economist “The World in 2014” Special Edition, titled; “Who’s Good at Forecasting – How to Sort the Best from the Rest” by Philip Tetlock and Dan Gardner which stated; “The only reliable method is to conduct a forecasting tournament” and the article discussed one strategy used by IARPA (Intelligence Advance Research Project Agency). In considering their methodology, I’d say a smart way to play it would be to run such a forecasting group for multiple years and those who do not score 80% or higher are not asked to participate in the future.
Why would I say this? Well, because I keep reading Doom and Gloom books, that turn out in hindsight to be completely wrong. Rather than apologize for terrible errors, these authors merely write another book with yet another future prediction. This is something I’ve seen all too often and why I did not renew my membership with the World Future Society – pretty much I just felt it was a whole bunch of people training themselves to all think the same, rubber stamping each other’s predictions and consistently 80% wrong every year for decades on end. Get this; they still do seminars ever year to help new comers learn “How to think like a Futurist” which I find hilarious – why would you want to learn how to think about the future from people who are nearly always wrong?
Interestingly enough, there was an article in the Wall Street Journal on January 4, 2014 titled; “Great Minds, Failed Profits” by James Grant – a book review of “Fortune Tellers” by Walter A. Friedman, Princeton Book Publishers, NJ, 2014, 273 pages, ISBN: 978-140084-986-4, $29.95 retail. The book review states a quote from the book namely;
“Economic Forecasters have never been very accurate. Yet their power and influence only seem to grow.”
Hmm – well, it appears this book makes my point for me, although I admit I’ve yet to read it, but no doubt this animosity and frustration is quite common, I am not alone, nor are you my reader apparently.
Lastly, Ben Bernanke’s (Federal Reserve outgoing Chairman) last words in his speech as outgoing FED (Federal Reserve Chairman) was that in the last few years, the FED has had significant challenges in forecasting, and it would behoove the committee to be weary of this as they attempt to predict the future. Wiser words could not have been spoken. Indeed, he’s absolutely correct. I hope you will please consider all this and think on it.