That guy who called the big one? Don’t listen to him.
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Re: That guy who called the big one? Don’t listen to him.
#2To me it seems that hardest part about predictions is the timing. It's not too hard to understand the macro economic trends and to see which way the wind is blowing, but it's very hard to know when it will happen and how quickly it will happen.
That's why day trading is gambling. The long term buy and hold, and the averaging down strategies will make you money, as long as you understand mid to long term direction of the economy and invest accordingly.
Re: That guy who called the big one? Don’t listen to him.
#3A much simpler explanation. Even though the prophet is usually wrong, we believe him when he's right because that's the only time we notice he has even made a prediction.
Re: That guy who called the big one? Don’t listen to him.
#4Read "The Drunkard's Walk: How Randomness Rules Our Lives"
http://www.amazon.com/Drunkards-Walk-Randomness-Rules-ebook/...
and everything will become clear.
Re: That guy who called the big one? Don’t listen to him.
#5Hasn't Taleb been making this argument for the last 15 years? He and Dr. Doom are both NYU faculty...that must be awkward.
Re: That guy who called the big one? Don’t listen to him.
#6A lot of this has to do with the way we "score" forecasts. Applying some kind of uniform weighting over forecasts is the natural, and wrong, way to think about things.
Nassim Nicholas Taleb (black swan, fooled by randomness) has written about his trading strategy. At his fund, he consistently takes positions that predict extreme events, and he's wrong almost all the time, consistently producing grinding, negative returns. He's only been right a couple times, but when he's right he's really right, making enough money that he doesn't need to make money anymore.
Re: That guy who called the big one? Don’t listen to him.
#7I had a professor that told me it's actually a good strategy to make wild predictions far in the future. If you're right, you look like an oracle. If you're wrong, nobody remembers to go back and dig up "he predicted this on this date", primarily because they're already focused on the next predictions. Most of the time it's a win-win; the farther out in the future the better.
Re: That guy who called the big one? Don’t listen to him.
#8I would buy this argument if it wasn't for the fact that he managed to not only correctly call the timing but also the cause of the recession.
It sounds to me like he's a good person to listen to for potential trouble spots. The economy is very path-dependent; just because someone is good at pointing out potential issues doesn't mean they're going to know how it turns out.
Re: That guy who called the big one? Don’t listen to him.
#9I had a professor that told me it's actually a good strategy to make wild predictions far in the future. If you're right, you look like an oracle. If you're wrong, nobody remembers to go back and dig up "he predicted this on this date", primarily because they're already focused on the next predictions. Most of the time it's a win-win; the farther out in the future the better.
It's not just wild predictions far in the future; even next year will usually do you more good than harm. Published predictions aren't meant to have anything to do with the future, they're for your enjoyment here and now[1].
[1] http://lesswrong.com/lw/hi/futuristic_predictions_as_consuma...
Re: That guy who called the big one? Don’t listen to him.
#10Personally, I like Schiller (http://www.econ.yale.edu/~shiller/) more than Roubini. His record: he wrote a book called Irrational Exuberance, and the .com market promptly crashed. He wrote papers from 2003 to 2007 suggesting the housing bubble was real, what it's effects were and how it might be mitigated / avoided.
Where Roubini simply says we're all walking in the dark, Schiller is the rare critical eye who offers, in public, insight about where and how things are going wrong.