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

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

by Nate Silver

Penguin Press (HC) | October 2, 2012 | Hardcover

The Signal And The Noise: Why So Many Predictions Fail-but Some Don't is rated 5 out of 5 by 2.
"Nate Silver''s The Signal and the Noise is The Soul of a New Machine for the 21st century." —Rachel Maddow, author of Drift

Nate Silver built an innovative system for predicting baseball performance, predicted the 2008 election within a hair’s breadth, and became a national sensation as a blogger—all by the time he was thirty. He solidified his standing as the nation''s foremost political forecaster with his near perfect prediction of the 2012 election. Silver is the founder and editor in chief of FiveThirtyEight.com.

Drawing on his own groundbreaking work, Silver examines the world of prediction, investigating how we can distinguish a true signal from a universe of noisy data. Most predictions fail, often at great cost to society, because most of us have a poor understanding of probability and uncertainty. Both experts and laypeople mistake more confident predictions for more accurate ones. But overconfidence is often the reason for failure. If our appreciation of uncertainty improves, our predictions can get better too. This is the “prediction paradox”: The more humility we have about our ability to make predictions, the more successful we can be in planning for the future.

In keeping with his own aim to seek truth from data, Silver visits the most successful forecasters in a range of areas, from hurricanes to baseball, from the poker table to the stock market, from Capitol Hill to the NBA. He explains and evaluates how these forecasters think and what bonds they share. What lies behind their success? Are they good—or just lucky? What patterns have they unraveled? And are their forecasts really right? He explores unanticipated commonalities and exposes unexpected juxtapositions. And sometimes, it is not so much how good a prediction is in an absolute sense that matters but how good it is relative to the competition. In other cases, prediction is still a very rudimentary—and dangerous—science.

Silver observes that the most accurate forecasters tend to have a superior command of probability, and they tend to be both humble and hardworking. They distinguish the predictable from the unpredictable, and they notice a thousand little details that lead them closer to the truth. Because of their appreciation of probability, they can distinguish the signal from the noise.

With everything from the health of the global economy to our ability to fight terrorism dependent on the quality of our predictions, Nate Silver’s insights are an essential read.

Format: Hardcover

Dimensions: 544 pages, 9.5 × 6.5 × 1.25 in

Published: October 2, 2012

Publisher: Penguin Press (HC)

Language: English

The following ISBNs are associated with this title:

ISBN - 10: 159420411X

ISBN - 13: 9781594204111

Found in: Social and Cultural Studies

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Reviews

Rated 5 out of 5 by from An Interesting Perspective on Making Predictions In this intriguing book, the author discusses the making of predictions/forecasts in a variety of different fields. He goes into a fair amount of detail regarding the approaches used and the degree of success and failure in each case. The topics considered include: the world economic crisis, elections, sports, weather forecasting, earthquakes, GDP, pandemics, chess, poker, stock market, climate change and terrorism – each of these is relegated to its own chapter. A fascinating chapter on Bayesian analysis is also included. The author’s writing style is very friendly, chatty, authoritative and quite engaging. Because of this, and the fact that no mathematical formulas/calculations are included in the main text (a formula is used in some of the tables on Bayesian analyses), this book should be accessible to a wide readership. In my case, I found that because of the great variety of subjects, I had more affinity for some, e.g., weather, earthquakes, pandemics, and much less than for others, e.g., economic crisis, GDP, stock market. I suspect that many readers may have their own preferences as well. Amply illustrated with various charts, plots, tables and other figures, this book, or at the very least parts of it, should appeal to any reader interested in the making of predictions.
Date published: 2014-01-28
Rated 5 out of 5 by from A Brief Summary and Review *A full executive summary of this book will be available at newbooksinbrief . wordpress . com, on or before Monday, October 15. Making decisions based on an assessment of future outcomes is a natural and inescapable part of the human condition. Indeed, as Nate Silver points out, "prediction is indispensable to our lives. Every time we choose a route to work, decide whether to go on a second date, or set money aside for a rainy day, we are making a forecast about how the future will proceed--and how our plans will affect the odds for a favorable outcome" (loc. 285). And over and above these private decisions, prognosticating does, of course, bleed over into the public realm; as indeed whole industries from weather forecasting, to sports betting, to financial investing are built on the premise that predictions of future outcomes are not only possible, but can be made reliable. As Silver points out, though, there is a wide discrepancy across industries and also between individuals regarding just how accurate these predictions are. In his new book `The Signal and the Noise: Why So Many Predictions Fail--but Some Don't' Silver attempts to get to the bottom of all this prediction-making to uncover what separates the accurate from the misguided. In doing so, the author first takes us on a journey through financial crashes, political elections, baseball games, weather reports, earthquakes, disease epidemics, sports bets, chess matches, poker tables, and the good ol' American economy, as we explore what goes into a well-made prediction and its opposite. The key teaching of this journey is that wise predictions come out of self-awareness, humility, and attention to detail: lack of self-awareness causes us to make predictions that tell us what we'd like to hear, rather than what is true; lack of humility causes us to feel more certain than is warranted, leading us to rash decisions; and lack of attention to detail leads us to miss the key variables that make all the difference. Attention to detail is what we need to capture the signal in the noise (the key variable[s] in the sea of data and information that are integral in determining future outcomes), but without self-awareness and humility, we don't even stand a chance. While self-awareness requires us to make an honest assessment of our particular biases, humility requires us to take a probabilistic approach to our predictions. Specifically, Silver advises a Bayesian approach. Bayes’ theorem has it that when it comes to making a prediction, the most prudent way to proceed is to first come up with an initial probability of a particular event occurring. Next, we must continually adjust this initial probability as new information filters in. The level of certainty that we can place on our initial estimate of the probability of a particular event (and the degree to which we can accurately refine it moving forward) is limited by the complexity of the field in which we are making our prediction, and also the amount and quality of the information that we have access to. For instance, in a field like baseball, where wins and losses mostly comes down to two variables (the skill of the pitchers, and the skill of the hitters), and where there is an enormous wealth of precise data, prediction is relatively straightforward (but still not easy). On the other hand, in a dynamic field such as the American economy, where the outcomes are influenced by an enormous number of variables, and where the interactions between these variables can become incredibly complex (due to things like positive and negative feedback), probabilities become a whole lot more difficult to pin down precisely (though they often remain possible on a general and/or long-term scale). It is also important to recognize that while additional information can help us no matter what field we are trying to make our prediction in, we must be careful not to think that information can stand on its own. Indeed, additional information (when it is not met with insightful analysis) often does nothing more than draw our attention away from the key variables that truly make a difference. It is for this reason that predictive models that rely on statistics and statistics alone are often not very effective (though they do often help a seasoned expert who is able to apply insightful analysis to them). If you are hoping that this book will make you a fool-proof prognosticator, you are going to be disappointed. A key tenet of the book is that this is simply not possible (no matter what field you are in). That being said, Silver makes a very strong argument that by applying a few simple principles (and putting in a lot of hard work in identifying key variables) our predictive powers should take a great boost indeed. A full executive summary of this book will be available at newbooksinbrief . wordpress . com, on or before Monday, October 15; a podcast discussion of the book will be available shortly thereafter.
Date published: 2012-10-04

– More About This Product –

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

by Nate Silver

Format: Hardcover

Dimensions: 544 pages, 9.5 × 6.5 × 1.25 in

Published: October 2, 2012

Publisher: Penguin Press (HC)

Language: English

The following ISBNs are associated with this title:

ISBN - 10: 159420411X

ISBN - 13: 9781594204111

About the Book

Silver built an innovative system for predicting baseball performance, predicted the 2008 election within a hair's breadth, and became a national sensation as a blogger. Drawing on his own groundbreaking work, Silver examines the world of prediction.

From the Publisher

"Nate Silver''s The Signal and the Noise is The Soul of a New Machine for the 21st century." —Rachel Maddow, author of Drift

Nate Silver built an innovative system for predicting baseball performance, predicted the 2008 election within a hair’s breadth, and became a national sensation as a blogger—all by the time he was thirty. He solidified his standing as the nation''s foremost political forecaster with his near perfect prediction of the 2012 election. Silver is the founder and editor in chief of FiveThirtyEight.com.

Drawing on his own groundbreaking work, Silver examines the world of prediction, investigating how we can distinguish a true signal from a universe of noisy data. Most predictions fail, often at great cost to society, because most of us have a poor understanding of probability and uncertainty. Both experts and laypeople mistake more confident predictions for more accurate ones. But overconfidence is often the reason for failure. If our appreciation of uncertainty improves, our predictions can get better too. This is the “prediction paradox”: The more humility we have about our ability to make predictions, the more successful we can be in planning for the future.

In keeping with his own aim to seek truth from data, Silver visits the most successful forecasters in a range of areas, from hurricanes to baseball, from the poker table to the stock market, from Capitol Hill to the NBA. He explains and evaluates how these forecasters think and what bonds they share. What lies behind their success? Are they good—or just lucky? What patterns have they unraveled? And are their forecasts really right? He explores unanticipated commonalities and exposes unexpected juxtapositions. And sometimes, it is not so much how good a prediction is in an absolute sense that matters but how good it is relative to the competition. In other cases, prediction is still a very rudimentary—and dangerous—science.

Silver observes that the most accurate forecasters tend to have a superior command of probability, and they tend to be both humble and hardworking. They distinguish the predictable from the unpredictable, and they notice a thousand little details that lead them closer to the truth. Because of their appreciation of probability, they can distinguish the signal from the noise.

With everything from the health of the global economy to our ability to fight terrorism dependent on the quality of our predictions, Nate Silver’s insights are an essential read.

About the Author

Nate Silver is the founder and editor in chief of FiveThirtyEight.com.


Editorial Reviews

“ Nate Silver’s The Signal and the Noise is The Soul of a New Machine for the 21st century (a century we thought we’d be a lot better at predicting than we actually are). Our political discourse is already better informed and more data-driven because of Nate’s influence. But here he shows us what he has always been able to see in the numbers—the heart and the ethical imperative of getting the quantitative questions right.  A wonderful read —totally engrossing.” —Rachel Maddow, author of Drift   “Yogi Berra was right: ‘forecasting is hard, especially about the future.’ In this important book , Nate Silver explains why the performance of experts varies from prescient to useless and why we must plan for the unexpected. Must reading for anyone who cares about what might happen next.” —Richard Thaler, co-author of Nudge    “Making predictions in the era of ‘big data’ is not what you might imagine. Nate Silver''s refreshing and original book provides unpredictably illuminating insights differentiating objective and subjective realities in forecasting our future. He reminds us that the human element is still essential in predicting advances in science, technology and even politics... if we were only wise enough to learn from our mistakes.” —Governor Jon Huntsman    “Here''s a prediction: after you read The Signal and the Noise, you''ll have
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