DECEMBER 29, 2023 – I am reading an excellent book titled “Superforecasting.” I wish it had been published 40 years ago.
Basically, it calls out all the pundits for being vague in their statements and forecasts. The very complaint I have had my whole life. He calls those people hedgehogs and explains why the Fake News Media and general public love these so-called ‘forecasters.’
The other end of the spectrum is us foxes. To be more specific, foxes with dragonfly eyes. We are willing to put specifics in our forecasts. Willing to change our predictions as we find out new information. And, best of all, willing to say we are wrong.
I won’t bore you with more details. You can read the book, if interested. My goal is to improve my forecasts by being more concrete in what I say. This doesn’t mean that I say something like there will be an 8.7 magnitude earthquake in St. Louis at 4:08 AM on July 5, 2024. That isn’t reasonable. But, also, I don’t use words like could and might and possibly and leave the forecast general with no timeframe, etc. The specificity comes in providing a percentage of probability of a clearly stated event occurring. e.g. There is only a 5% chance in 2024 that the average 30-year residential mortgage will exceed 8% nationwide. That is specific enough to determine if I am right or wrong. Yes, the 5% is a bit gray. But, it has provided a specific number versus unmeasurable wording like ‘it is unlikely.’
So, here is your challenge, again if interested. Email me (GeorgeRMann@Aol.Com) something you want me to forecast. Preferably in 2024 so we don’t have to wait til 2030 to see if I was right or wrong. If I get a lot of suggestions, I might need to just pick a few. Don’t be offended if I don’t pick yours:)
The topic can be anything. This originated with Enrico Fermi asking his class to estimate the number of piano tuners in Chicago. At the time, they did not have the internet to help with research. So, some things you might ask me…these are made up off the top of my head just to give you some examples to help with your suggestion. What is the probability that Iran will test its first nuclear bomb in 2024? Will the number of American bank failures exceed 20 in 2024? Will we meet the official definition of a recession and have 2 consecutive quarters of negative GDP in 2024? Will Venezuela have a new leader by the end of 2024? Hopefully, those give you some idea. As needed, I will edit the wording to be sure it is specific and there is no ‘out’ for my forecast because of some gray, general words. Please do not ask me to state the closing price of the DOW 30 on June 20, 2024. That is just a guess with zero chance of being exactly correct. Better wording would be, will the DOW 30 exceed 40,000 by June 20, 2024. Lastly, I am mulling over stating my exact thinking as I come up with my forecast. I think that will help people see how to forecast better themselves.
I look forward to your emails. Even just 2 or 3 will be good for me to start this process of improving my forecasting ability. Thanks in advance for your emails.
Happy New Year!