Money and Finance
- Michael Pettis: Revisiting My 2011 Predictions
It is still too early for all of these predictions either to have materialized or to have failed, but I thought it might be useful to review them to see whether or not they have been reasonably accurate in describing unfolding events and, if not, how...
- Warren's Way - By James Surowiecki
Warren Buffett’s tastes haven’t changed much over the years. “I like today what I liked fifty years ago,” he told me the other day. “I like reading 10-Ks. I like playing bridge. I haven’t acquired a lot of new habits. I was happy when I was...
- Nassim Taleb Quote
“…invest in preparedness, not in prediction.” –Nassim Taleb, The Black Swan ...
- Nassim Taleb Quote (prediction And Technology)
"Prediction requires knowing about technologies that will be discovered in the future. But that very knowledge would almost automatically allow us to start developing those technologies right away. Ergo, we do not know what we will know." -Nassim Taleb,...
- The Economist Magazine - The World In 2036: Nassim Taleb Looks At What Will Break, And What Won't
Paradoxically, one can make long-term predictions on the basis of the prevalence of forecasting errors. A system that is over-reliant on prediction (through leverage, like the banking system before the recent crisis), hence fragile to unforeseen “black...
Money and Finance
On the Difference between Binary Prediction and True Exposure, with Implications for Forecasting Tournaments and Prediction Markets – By Nassim Nicholas Taleb and Philip E. Tetlock
Abstract:
There are serious differences between predictions, bets, and exposures that have a yes/no type of payoff, the "binaries", and those that have varying payoffs, which we call the "vanilla". Real world exposures tend to belong to the vanilla category, and are poorly captured by binaries. Vanilla exposures are sensitive to Black Swan effects, model errors, and prediction problems, while the binaries are largely immune to them. The binaries are mathematically tractable, while the vanilla are much less so. Hedging vanilla exposures with binary bets can be disastrous--and because of the human tendency to engage in attribute substitution when confronted by difficult questions, decision-makers and researchers often confuse the vanilla for the binary.
- Michael Pettis: Revisiting My 2011 Predictions
It is still too early for all of these predictions either to have materialized or to have failed, but I thought it might be useful to review them to see whether or not they have been reasonably accurate in describing unfolding events and, if not, how...
- Warren's Way - By James Surowiecki
Warren Buffett’s tastes haven’t changed much over the years. “I like today what I liked fifty years ago,” he told me the other day. “I like reading 10-Ks. I like playing bridge. I haven’t acquired a lot of new habits. I was happy when I was...
- Nassim Taleb Quote
“…invest in preparedness, not in prediction.” –Nassim Taleb, The Black Swan ...
- Nassim Taleb Quote (prediction And Technology)
"Prediction requires knowing about technologies that will be discovered in the future. But that very knowledge would almost automatically allow us to start developing those technologies right away. Ergo, we do not know what we will know." -Nassim Taleb,...
- The Economist Magazine - The World In 2036: Nassim Taleb Looks At What Will Break, And What Won't
Paradoxically, one can make long-term predictions on the basis of the prevalence of forecasting errors. A system that is over-reliant on prediction (through leverage, like the banking system before the recent crisis), hence fragile to unforeseen “black...