The Signal and the Noise: Why So Many Predictions Fail--but Some Don't

NateSilverbuiltaninnovativesystemforpredictingbaseballperformance，predictedthe2008electionwithinahair’sbreadth，andbecameanationalsensationasablogger—allbythetimehewasthirty.Hesolidifiedhisstandingasthenation'sforemostpoliticalforecasterwithhisnearperfectpredictionofthe2012election.SilveristhefounderandeditorinchiefofFiveThirtyEight.com.Drawingonhisowngroundbreakingwork，Silverexaminestheworldofprediction，investigatinghowwecandistinguishatruesignalfromauniverseofnoisydata.Mostpredictionsfail，oftenatgreatcosttosociety，becausemostofushaveapoorunderstandingofprobabilityanduncertainty.Bothexpertsandlaypeoplemistakemoreconfidentpredictionsformoreaccurateones.Butoverconfidenceisoftenthereasonforfailure.Ifourappreciationofuncertaintyimproves，ourpredictionscangetbettertoo.Thisisthe“predictionparadox”：Themorehumilitywehaveaboutourabilitytomakepredictions，themoresuccessfulwecanbeinplanningforthefuture.Inkeepingwithhisownaimtoseektruthfromdata，Silvervisitsthemostsuccessfulforecastersinarangeofareas，fromhurricanestobaseball，fromthepokertabletothestockmarket，fromCapitolHilltotheNBA.Heexplainsandevaluateshowtheseforecastersthinkandwhatbondstheyshare.Whatliesbehindtheirsuccess?Aretheygood—orjustlucky?Whatpatternshavetheyunraveled?Andaretheirforecastsreallyright?Heexploresunanticipatedcommonalitiesandexposesunexpectedjuxtapositions.Andsometimes，itisnotsomuchhowgoodapredictionisinanabsolutesensethatmattersbuthowgooditisrelativetothecompetition.Inothercases，predictionisstillaveryrudimentary—anddangerous—science.Silverobservesthatthemostaccurateforecasterstendtohaveasuperiorcommandofprobability，andtheytendtobebothhumbleandhardworking.Theydistinguishthepredictablefromtheunpredictable，andtheynoticeathousandlittledetailsthatleadthemclosertothetruth.Becauseoftheirappreciationofprobability，theycandistinguishthesignalfromthenoise.Witheverythingfromthehealthoftheglobaleconomytoourabilitytofightterrorismdependentonthequalityofourpredictions，NateSilver’sinsightsareanessentialread.