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Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

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Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#31

Post by nl »

rsj_hn wrote: post #6
wand3r wrote: post #4

Earlier quoted context omitted.

I mean obviously its hard to make predictions of complex things as the data from every angle is difficult to get and sometimes incorrect. I used to love Taleb but he is more of a broken cloc, many say if he stopped writing after black swan he would have gone down as great but some of his other points and politics have undermined him. I think Silver is actually pretty legit. He was over-hyped, then he was largely pann…

Taleb actually makes a great point here and published a pretty cool paper about it. The point is that if a probability of the event changes too much, you can arbitrage it. E.g. assume these are payoff odds and you can sell your position before the event. He then found some nice no-arbitrage conditions that "real" probabilities must meet and showed that Nate's predictive timeline allowed arbitrage. Unfortunately Nate…

Is it a great point?

He seems to miss the point of what 538 is doing. Their nowcasts are attempts to say what would happen if the election was today, which throws away the time-dependent uncertainty.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#32

Post by c3534l »

kingkawn wrote: post #26
comex wrote: post #21

The article seems like an oversimplification of the underlying dispute. - It’s not necessary or even useful to define an arbitrary “decision boundary” unless you actually have to make a decision. From a Bayesian perspective, a probability stands for itself: 100% means the event is certain to occur, 50% means you have no idea, and numbers in between convey varying levels of certainty. In reality, 538’s predictions are…

Seems like in addition to whether they're more swingy than they should be, are they being presented in a way that is interpreted as more certain or authoritative than they can possibly claim?

538 provides pretty in-depth discussions of it forecasts and changes in it. Far more than you would expect - and I think because 538 is ultimately a statistics blog at heart, not a political blog.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#33

Post by pmart123 »

I liked the first chapter of "Fooled by Randomness," but I stopped reading the book when each chapter regurgitated the same points, each more nihilistic than the last. Perhaps Taleb should concentrate on the accuracy of his own predictions:

https://www.businessinsider.com/taleb-every-single-human-bei...

>>> "every single human being" should bet U.S. Treasury bonds will decline.

>>> Short the S&P vs Long Gold, in a 5 to 1 ratio. By gold Taleb means a basket of precious metals including gold.

The second trade would have lost $125k for every $10k invested in gold and $50k invested in SPY.

Did he miscalculate the risk of a black swan event...?

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#34

Post by MAXPOOL »

cm2012 wrote: post #11
tareqak wrote: post #5

As a non-specialist, I like how the discussion boils down the picture at the end: https://cdn-images-1.medium.com/max/1600/1*D_tidaT-fHMY3DRLg... in that it is something I can understand.

Nate Silver always calls the nowcast (blue line) for what it is - a forecast for if the election was held that day. The forecast, made a few days before election day, is the official forecast and the one that beats most other estimates.

I'm just eyeballing it, but it seems like linear trend line of the nowcast (blue line), would be very close to the official forecast (red dot).

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#35

Post by azernik »

kingkawn wrote: post #26
comex wrote: post #21

The article seems like an oversimplification of the underlying dispute. - It’s not necessary or even useful to define an arbitrary “decision boundary” unless you actually have to make a decision. From a Bayesian perspective, a probability stands for itself: 100% means the event is certain to occur, 50% means you have no idea, and numbers in between convey varying levels of certainty. In reality, 538’s predictions are…

Seems like in addition to whether they're more swingy than they should be, are they being presented in a way that is interpreted as more certain or authoritative than they can possibly claim?

That is actually an issue they've acknowledged and tried to address. People also tended to see percentages and think they reflected vote percents.

To address this, for the 2018 election cycle 538 started displaying their odds as numerical ratios (5 in 9, for example) to try to reduce the aura of certainty.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#37

Post by hn_throwaway_99 »

mturmon wrote: post #25

This is an intellectually confused post. It is so unclear and muddled that only a charitable reader would suppose the author understands the mathematical and modeling issues here. I’m surprised the author published it in this form - you don’t want to jump into a controversy like this with such an unclear discussion. As just one example, the whole digression on a “decision boundary” is conceptually mistaken. Once you…

Agreed. The more I read the more I got embarrassed for the author, mainly because his points were so ridiculously flimsy. I thought this was one of the worst:

> Because FiveThirtyEight only predicts probabilities, they do not ever take an absolute stand on an outcome: No ‘skin in the game’ as Taleb would say. This is not, however, something their readers follow suit on. In the public eye, they (FiveThirtyEight) are judged on how many events with forecasted probabilities above and below 50% happened or didn’t respectively (in a binary setting).

Saying "this is not something their readers follow suit on" - only if you're a reader who doesn't understand probability. In fact, Silver is constantly trying to get across how likely If anything, I love Silver's reality-based approach exactly because he does acknowledge that all he can do is offer a best estimate based on available evidence, instead of saying things with false-certainty and then basking in self-proclaimed genius when luck happened to run in his favor.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#38

Post by chimeracoder »

comex wrote: post #21

The article seems like an oversimplification of the underlying dispute. - It’s not necessary or even useful to define an arbitrary “decision boundary” unless you actually have to make a decision. From a Bayesian perspective, a probability stands for itself: 100% means the event is certain to occur, 50% means you have no idea, and numbers in between convey varying levels of certainty. In reality, 538’s predictions are…

> 100% means the event is certain to occur

Actually, 100% means the event is "almost certain". That's not an accidental choice of words; it's a technical term which conveys important meaning about how we reason about probability.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#39

Post by acidburnNSA »

mturmon wrote: post #25

This is an intellectually confused post. It is so unclear and muddled that only a charitable reader would suppose the author understands the mathematical and modeling issues here. I’m surprised the author published it in this form - you don’t want to jump into a controversy like this with such an unclear discussion. As just one example, the whole digression on a “decision boundary” is conceptually mistaken. Once you…

Peripherally, I like using nuclear reactor design analogies for Aleatory vs. Epistemic.

Aleatory is the inherent randomness of a system. You can characterize it but it's often hard to reduce. For example, how much boron impurities are mixed into your steel at the time of manufacture.

Epistemic is things that are knowable but you don't know with much certainty (because it's hard to measure), like the probability that an incident neutron at 1 MeV will inelasatically scatter off a Uranium-238 nucleus and emerge at 200 keV in some direction.

Re: Why we should care about the Nate Silver vs. Nassim Taleb Twitter war

#40

Post by nabla9 »

mhb wrote: post #14

Shouldn't a guy like Taleb be able to propose a bet with Silver that demonstrates he (Taleb) is right?

Yes, but when they would settle the rules of the bet, Taleb's confusion between nowcast and forecast would have to go away and what they would use to base their bet then? Losing an argument is as bad as losing a bet. I don't think Taleb want's to acknowledge that he was picking a fight for nothing.

Note: I'm don't think Taleb has a wrong idea. It's just that he attempt to fight with Silver over it is based on confusion. Taleb has written important and interesting books and papers. He has always been very opinionated and aggressive. His feuds don't produce debates that are worth following.

Election Predictions as Martingales: An Arbitrage Approach, Nassim Nicholas Taleb Quantitative Finance. 452 (1): 1–5. doi:10.1080/14697688.2017.1395230 https://arxiv.org/abs/1703.06351

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