The Signal and the Noise

2014-12-01 10:38:55 Uncertainty, on the other hand, is risk that is hard to measure.

2014-12-01 10:39:51 The alchemy that the ratings agencies performed was to spin uncertainty into what looked and felt like risk. They took highly novel securities, subject to an enormous amount of systemic uncertainty, and claimed the ability to quantify just how risky they were

2014-12-02 17:50:34 Instead of physics or biology, however, electoral forecasting resembles something like poker: we can observe our opponent’s behavior and pick up a few clues, but we can’t see his cards. Making the most of that

2014-12-02 17:50:38 limited information requires a willingness to update one’s forecast as newer and better information becomes available. It is the alternative—failing to change our forecast because we risk embarrassment by doing so—that reveals a lack of courage.

2014-12-05 08:26:34 A prediction is a definitive and specific statement about when and where an earthquake will strike: a major earthquake will hit Kyoto, Japan, on June 28

2014-12-05 08:26:42 Whereas a forecast is a probabilistic statement, usually over a longer time scale: there is a 60 percent chance of an earthquake in Southern California over the next thirty years.

2014-12-07 11:15:12 . I suspect that epidemiologists, and others in the medical community, understand this because of their adherence to the Hippocratic oath. Primum non nocere: First, do no harm.

2014-12-07 12:34:03 So Voulgaris is not just looking for patterns. Finding

2014-12-07 12:34:15 patterns is easy in any kind of data-rich environment; that’s what mediocre gamblers do. The key is in determining whether the patterns represent noise or signal.

2014-12-09 10:44:01 What you see is a graph that consists of effort on one axis and accuracy on the other. You could label the axes differently—for instance, experience on the one hand and skill on the other. But the same general idea holds. By effort or experience I mean the amount of money, time, or critical thinking that you are willing to devote toward a predictive problem. By accuracy or skill I mean how reliable the predictions will prove to be in the real world.

2014-12-10 09:51:50 the worst forecaster takes the “prize.” This is known as the “winner’s curse.”

2014-12-11 00:45:12 [T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—there are things we do

2014-12-11 00:45:19 not know we don’t know.—Donald Rumsfeld21

Third test, content...

最失败的预测通常有很多共同点，即我们只关注那些符合我们对这个世界的期许的信息，而不在乎其真实性。对于那些最难测定的风险，即使它们严重威胁到我们的幸福生活，我们也会对其视而不见。我们所作的各种预估和假设要比现实状况简单得多。即使在解决问题时绕不开不确定性，我们也会刻意地回避它。