"Superforecasting" - When Making Predictions “How” You Think is More Important than “What” You Think

Jason Zweig of The Wall Street Journal discusses Philip Tetlock’s new book, “Superforecasting: The Art and Science of Prediction”. Zweig thinks the book “is the most important book on decision making since” Daniel Kahneman’s “Thinking, Fast and Slow.”” The underlying data used for much of the book comes from 20,000 amateurs who made predictions on a wide array of areas. The accuracy of these predictions were then compared to experts. The results showed that “the amateurs won — hands down.” The “Superforecasters”, those in the top 2%, performed 30% better in making accurate predictions than experts with access to key and classified information. “What you think is much less important than how you think,” says Prof. Tetlock; superforecasters regard their views “as hypotheses to be tested, not treasures to be guarded.” According to Zweig, investors can improve how they go about thinking of future events by looking at the historical evidence and probabilities and trying to take those things into consideration within their thought process.