Dating an investment banker anonymous
Silver – among the most widely admired public forecasters of political outcomes – eviscerates this type of ‘prediction,’ citing data that shows these commentators make accurate predictions no more often than would a random coin toss.Small ideas, nuanced, uncertain, and modest, however, make for poor television ratings.But Silver does have a Big Idea himself For complex, hard to predict phenomena, Silver explains his preferred method, based on a probability theorem attributed to an 18 Century English minister Thomas Bayes.His big idea is for us to move away from “I have the explanation and I know what’s going to happen,” to a different way of understanding the world characterized by “I can articulate a range of outcomes and attach meaningful probabilities to the possible outcomes.” Over time, as we refine our data gathering and multifaceted models, we can move our small ideas forward and become ‘less wrong’ about the world.
In the investment world the former style of traders – the one’s with big ideas and certainty – may have a good run of success, but generally get flushed out when markets turn.
In both cases – success or failure – we’re prone to adopt an uncritical approach to the right level of responsibility for outcomes. Efficient market hypothesis as an illustration of the Bayesian approach Although Silver gives numerous examples of his Bayesian probabilistic approach to problems with numbers, one of his best examples is purely textual, on the efficient market hypothesis.