141–150 of 213 posts
I think the world would be a better place if nobody did any election forecasting. I don't see what positive value these forecasts provide.
It gives us brain damage and entertainment, not much unlike election forecasting.
Earlier quoted context omitted.
Yeah, "extremely possible" is perhaps a poor choice of words, and could be interpreted uncharitably as a hedge against any outcome, but I think there's an obvious charitable interpretation too: that things that have a 20% chance of occurring turn out to occur around 20% of the time. No one would be blown away by surprise if I proclaimed "SIX!" then rolled a six-sided die and got a six, but that's even less likely tha…
Loads of people criticized Silver for not having "predicted" Trump's electoral victory. I imagine Silver's language was trying to hand-hold people to an understanding that even 20% probability events happen 1 out of 5 times. With so many people trying to twist and spin every headline, prediction, number, I appreciate Silver's attempt to make a reasonable guess with transparent methodologies.
Earlier quoted context omitted.
Loads of people criticized Silver for not having "predicted" Trump's electoral victory. I imagine Silver's language was trying to hand-hold people to an understanding that even 20% probability events happen 1 out of 5 times. With so many people trying to twist and spin every headline, prediction, number, I appreciate Silver's attempt to make a reasonable guess with transparent methodologies.
I have a hard time understanding this: what does it mean to assign probabilities to one-off events?? The only way to verify probabilities predictions is to test it a great number of times. Otherwise you can say anything and never be wrong (except for 0 or 100%).
Isn’t it just one big misunderstanding between them? Taleb thinks 538’s probabilities represent a binary option price on the event, in which case, yes, the probabilities should stay very close to 50% because the vol is so high. Whereas Silver’s models are actually saying “Based on current polls, if the election were held tomorrow, then the probability candidate X wins is Y%” and are thus allowed to swing more wildly.…
You basically have it right. But it's not a misunderstanding. Taleb understands Silver's approach, but thinks it's BS, entertainment not forecasting. He's right, but I don't know why he cares. The problem isn't that Silver doesn't know math, it's that his goal is to entertain, not predict.
I realize that Black Swan is popular here, but it was horrendous. A single essential premise which, instead of support, rested for chapter after chapter on assertions. That’s not evidence, it wasn’t an argument, it was the sound of someone having one good idea and then realizing they lacked the capacity to support it.
Isn’t it just one big misunderstanding between them? Taleb thinks 538’s probabilities represent a binary option price on the event, in which case, yes, the probabilities should stay very close to 50% because the vol is so high. Whereas Silver’s models are actually saying “Based on current polls, if the election were held tomorrow, then the probability candidate X wins is Y%” and are thus allowed to swing more wildly.…
You basically have it right. But it's not a misunderstanding. Taleb understands Silver's approach, but thinks it's BS, entertainment not forecasting. He's right, but I don't know why he cares. The problem isn't that Silver doesn't know math, it's that his goal is to entertain, not predict.
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> An arbitrage is just a strategy that's guaranteed to make money. If you know for sure that something will go up and down at different points you could make money risk free. Simply buy at any point below the current price and sell at any point above. This is not arbitrage. Also this is precisely the kind of strategy Taleb would have argued against in his book about black swan events.
Time arbitrage is arbitrage. If someone was flipping a coin and raising their price when it landed heads and lowering it when tails, arbitraging using reversion to the means would be a perfectly legitimate arb strategy. Taleb's argument is that Silver's estimates are based on random noise, and are thus vulnerable to this form of arbitrage.
Isn’t it just one big misunderstanding between them? Taleb thinks 538’s probabilities represent a binary option price on the event, in which case, yes, the probabilities should stay very close to 50% because the vol is so high. Whereas Silver’s models are actually saying “Based on current polls, if the election were held tomorrow, then the probability candidate X wins is Y%” and are thus allowed to swing more wildly.…
Huh, yeah, that sounds very plausible. A forecast that really did try to be an option pricing model like that would be interesting to see. It would have the advantage over a “now cast” that you could actually run the numbers and see how accurate it is. Whereas nobody can ever know what would actually happen if there were an election now rather than a year from now.
Silver’s election forecast models are exactly that. The nowcast expressly is not, but it's also not the headline model.
> It would have the advantage over a “now cast” that you could actually run the numbers and see how accurate it is.
That's true, and not just in theory: Silver has recently run the numbers for all of 538s forecasts (together and separated by sports vs. elections) and they are relatively accurate but not perfect; the supporting data is available for download, too.
Isn’t it just one big misunderstanding between them? Taleb thinks 538’s probabilities represent a binary option price on the event, in which case, yes, the probabilities should stay very close to 50% because the vol is so high. Whereas Silver’s models are actually saying “Based on current polls, if the election were held tomorrow, then the probability candidate X wins is Y%” and are thus allowed to swing more wildly.…
Earlier quoted context omitted.
Time arbitrage is arbitrage. If someone was flipping a coin and raising their price when it landed heads and lowering it when tails, arbitraging using reversion to the means would be a perfectly legitimate arb strategy. Taleb's argument is that Silver's estimates are based on random noise, and are thus vulnerable to this form of arbitrage.
A price set by coin-flips does not revert to any mean. It's a random walk and it diverges. The idea that heads and tails must eventually even out is a common fallacy.
Earlier quoted context omitted.
The best criticism I can come up with is that 538 probably doesn't do a sufficient job of explaining to its audience that their published probabilities are predictions for what would happen if the event occurred today . This seems to be one of Taleb's (and others') criticisms of their predictions: that they don't consider the probability of major unexpected events occurring between now and the event (like an athlete…
But that's just nonsense. If something happened yesterday that has people all hot and bothered today but which nobody will give a shit about anymore by the time the next election rolls around, Silver should say "nobody will give a shit about this anymore by the time next election rolls around." Giving a numerical value of how it would effect the election if it were to happen tomorrow is gibberish on the level of "if…