Better's Blinkist

What’s in it for me? Learn how to make excellent forecasts.

why groups of forecasters are more successful than individual forecasters

13 March, 2021 09:24 Share

Forecasting has certain limitations, but that’s no reason to dismiss it.

There is a theoretical explanation of why it’s difficult to predict such events. It’s called chaos theory (also known as the butterfly effect), and American meteorologist Edward Lorenz explains it thus: in nonlinear systems like the Earth’s atmosphere, even minute changes can have a considerable impact. If the trajectory of the wind shifts by less than a fraction of a degree, the long-term weather patterns can change drastically. Dramatically put: the flap of a butterfly’s wing in Brazil can cause a tornado in Texas.

13 March, 2021 09:25 Share

Weather forecasts are relatively reliable when made a few days in advance. Why? Because weather forecasters analyze the accuracy of their forecasts after the fact. By comparing their forecast with the actual weather, they improve their understanding of how the weather works. The problem is, people in other fields usually do not measure the accuracy of their forecasts!

13 March, 2021 09:25 Share

we need to work on accuracy and get serious about comparing what we thought would happen with what actually ends up taking place. And that means getting serious about measuring.

13 March, 2021 09:26 Share

Avoid using vague language and be as precise as possible.

voilà

13 March, 2021 09:26 Share

He said that, indeed, the iPhone might generate a lot of money; however, it would never gain a significant market share in the global cell-phone market (his prediction: between two and three percent). Rather, the software from his company, Microsoft, would come to dominate. And this prediction was, more or less, correct.

13 March, 2021 09:27 Share

Forecasts should also avoid vague language and use numbers for increased precision. Vague words, such as "could," "might" or "likely," are common in forecasting, but research shows that people attach different meanings to words like these. Forecasters should therefore talk about chance as accurately as possible, by using percentages, for instance.

13 March, 2021 09:28 Share

Keep score if you want to improve the accuracy of your forecasts.

how do we avoid horrendous errors like what happened with the WMDs? Clearly, more accuracy is needed in our forecasts. Let’s look at some ways of attaining this. The best way is to keep score.

13 March, 2021 09:29 Share

By using scoring, the team hoped to improve prediction accuracy

13 March, 2021 09:30 Share

Superforecasters break down problems into smaller units to start their analysis.

A superforecaster tackles a question by breaking down seemingly impossible problems into bite-sized sub-problems

13 March, 2021 09:31 Share

Flack ascertained the basics first, before looking for subsequent assumptions, which is precisely what an effective forecaster does.

13 March, 2021 09:33 Share

Flack ascertained the basics first, before looking for subsequent assumptions, which is precisely what an effective forecaster does

13 March, 2021 09:33 Share

Start from the outside, then turn to the inside view for an accurate forecast.

As every situation is unique, you should avoid jumping the gun and judging a case too quickly. The best way to approach any question is to take an outside view, which means finding out what the base rate is. But what exactly does that mean?

13 March, 2021 09:33 Share

A superforecaster wouldn’t look at details first. Instead, she would begin by researching what percentage, or base rate, of American households own a pet. Within a matter of seconds, thanks to Google, you’d find that figure to be 62 percent. This is your outside view

13 March, 2021 09:35 Share

The reasoning behind the outside view stems from a concept called anchoring. An anchor is the initial figure, before adjustments are made. If you instead began with the finer details, your prediction is much likelier to be miles away from any anchor or accurate number.

13 March, 2021 09:35 Share

Stay up-to-date even after your initial conclusion and adjust your forecasts with new information.

We’ve seen how superforecasters get the process going, but once you’ve made your initial forecast, you can’t just wait and see if you were right. You’ve got to update and modify your judgment based on any new piece of information

13 March, 2021 09:36 Share

Skillful updating, therefore, requires teasing out subtle details from extraneous information. Don’t be afraid to change your mind, but think twice about whether new information is useful or not!

13 March, 2021 09:38 Share

Working in teams can be helpful in forecasting, but only if you do it right.

At the very beginning, the research team shared insights on group dynamics and cautioned the online groups about groupthink. At the end of the first year, the results were in: on average, those who worked in teams were 23 percent more accurate than individuals. The second year, the research team chose to place superforecasters, as opposed to regular forecasters, in groups and found them to vastly outperform the regular groups.

13 March, 2021 09:39 Share

Another way to increase teamwork effectiveness is through precision questioning, which encourages people to rethink their argument. This is nothing new, of course, as great teachers have practiced precision questioning since the time of Socrates

13 March, 2021 09:39 Share

Precision questioning means getting to the finer details of an argument, like by asking for the definition of a particular term. Even if opinions are polarized on the matter, this questioning reveals the thinking behind the conclusion, which opens it up to further investigation.

13 March, 2021 09:40 Share

Final summary

Superforecasting isn’t restricted to computers or geniuses. It’s a trainable skill that involves evidence-gathering, score-keeping, keeping yourself updated about new information and patience.

13 March, 2021 09:40 Share