Are you a superforecaster? I’m not
But I know of one who is! Philip E Tetlock, and colleague Dan Gardner, are the authors of the book ‘Superforecasting: the Art and Science of Prediction’ published by Cornerstone Digital in 2015. A Toronto-born academic, he works at the intersection between political forecasting, social science, psychology, organisational behaviour and decision making.
He started in 1984 by organising small-scale forecasting tournaments using 284 experts in various fields; by 2003 he had decided that those with the highest media profiles often had the worst results, and concluded there was a perverse inverse relationship between fame and accuracy.
In 2011 he started the Good Judgement Project (GJP) with his psychologist wife Barbara Mellers and Don Moore, a specialist in over-confidence; they aimed at harnessing the wisdom of crowds. The 3000 volunteers only needed an interest in current affairs and an internet connection; then each forecaster’s predictions were tracked and scored. They picked the 60 most accurate and found that they beat the professionals by a wide margin. Tetlock concluded that ‘it doesn’t really matter how smart you are’, as recorded in an interview in Lunch with the FT (9/10 July 2016).
They then started grouping the traits these people had, which made them super forecasters. These, summarised by Matthew Russell of M&G (https://www.bondvigilantes.com/blog/author/matthewrussell/), are as follows:
The ability to aggregate information from multiple sources.
Moderately intelligent and numerate.
Curious, with an appetite for information.
A healthy amount of cynicism.
They updated their forecasts regularly.
They were unafraid the change their minds.
They were humble.
Tetlock himself says that estimating the probability of unique events is a skill that can be, and is worth, cultivating. Just the sort of thing a professional trader is doing all the time.
Now as for the traits that help, I think there are one or two that I have to work on. I also know who ought to be more humble!
Another (slightly off-piste) book for the STA Library, maybe?
Tags: Crowds, forecasting, probability
The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.
- Old men and obituaries: Looking back, short and long term December 6, 2023
- ‘‘The digital euro is on the move!’’ ‘We need to prepare our currency for the future’, Christine Lagarde November 21, 2023
- ‘Surfing the Waves of Social Mood’ STA presentation by Robert R. Prechter, CMT November 16, 2023
- Fickle followers of fashion: Who, and why, do they choose to move on? November 10, 2023
- Crisis, what crisis? Can technical analysis help? October 24, 2023
- A fireside chat with author Jack D Schwager: He of Market Wizards fame on
- Market Wizards – and their lesser known cohorts: Jack Schwager hits the book launch circuit on
- Colours, clashes and clichés: How and why use colourful charts on
- Do you know Aroon? I do, but not very well on
- Must read classics: Richard W Schabacker – the real bible of technical analysis on