I can predict the future

I can predict the future, with the following caveat:

Not all the time.

I’m rather chuffed by a couple of predictions I’ve made recently, and after I tell you about them I’m going to describe the surprising results of some recent research that has me abuzz.

The first thing I predicted was the fall in Apple’s share price when it was heading to around $700 and people were excitedly predicting a price of $1000. No, I did not put my money where my mouth was.

The second thing I successfully predicted was the beginning of the end of US monetary easing, in December. No, I did not put my money where my mouth was.

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Would this have happened to me if I really could predict the future?

So, is it possible to predict the future better than randomly?

Research suggests the answer is yes. A Research project sponsored by IARPA (the U.S. Intelligence Advanced Research Projects Activity) over the last four years has assembled huge panels of forecasters. It is called the Good Judgment Project. They get asked hundreds of questions on world events, such as what might happen in Syria, will  a certain country exit the euro, etc.

The Economist describes the big finding of the project:

“The big surprise has been the support for the unabashedly elitist “super-forecaster” hypothesis. The top 2% of forecasters in Year 1 showed that there is more than luck at play. If it were just luck, the “supers” would regress to the mean: yesterday’s champs would be today’s chumps. But they actually got better. When we randomly assigned “supers” into elite teams, they blew the lid off IARPA’s performance goals. They beat the unweighted average (wisdom-of-overall-crowd) by 65%; beat the best algorithms of four competitor institutions by 35-60%; and beat two prediction markets by 20-35%.”

Aggregated forecasts of the Good Judgment Project are submitted to the IARPA forecasting tournament, which they won last year.

I have applied to join the panel of forecasters in 2014, and have sat a battery of online tests, including some very difficult questions! Such as:

True or False, Cuba helped to organize negotiations between the government of Colombia and FARC (Spanish acronym), the Revolutionary Armed Forces of Colombia

and:

the meaning of DESUETUDE

and complete the pattern games:

trauma  tuna          flight  fit          wife  __ a __ __          glossy  gravity

They did political spectrum testing, put me through an ultimatum game, did lots of spatial, mathematical and verbal IQ stuff, and checked basic general knowledge.

I’m excited to get started. The project provides feedback directly to participants on their forecasting prowess as events transpire or fail to transpire. It should serve as a check on overconfidence.

In the meantime, I have one last forecast that I have publicly made. I went to the website of a certain sportsbetting company and put $100 on Daft Punk to win this year’s Hottest 100 with the song Get Lucky.

I mention this here only in the interests of extreme transparency. While to me it is obvious the song is the best of last year, there may be a certain youth and antipodean bias at triple J. Promotion for the Hottest 100 features the teenage Kiwi heavily:

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Will that bias the vote? Will I lose my $100? Will that instil new levels of humility in me? That I can’t predict.

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

9 thoughts on “I can predict the future”

  1. I thought the egg was good they did it on centre court too

    I don’t understand the word sequence (annoyingly) as my brain must be in a state of desuetude

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    1. If anyone can get the word that fits in that sequence I will be impressed. I guessed wave, but with about 20 percent confidence.

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      1. I had this test a couple days ago, and guessed at WAGE. Today while meditating, I think I struck upon the logic and think WAGE is actually correct. Each word pair is comprised of the first letter of the first word and the last letter of the second word; I think we all get that. What happens in the middle is the tough part. What I suspect happens is you take the second to last letter and progress one letter. Thus TRAUMA becomes TNA, FLIGHT becomes FIT, WIFE becomes WGE, and GLOSSY becomes GTY. The is merely a string of zero or more letters to create an actual word. If I’m right, one could perhaps have just as easily had FORFEIT instead of FIT, WATTAGE instead of WAGE, etc. To avoid this, the testers forced you to make a four-letter word with the letter A in it.

        Thoughts? Dispute?

        Liked by 1 person

      2. Kudos to the intellectual powers of Andrew! I hadn’t thought of that but i is certainly a good hypothesis.

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      3. Thanks for the kudos, but it’s all just a guess. I’m hoping the shrink who gave me the test will tell me the answer tomorrow when we talk. BTW, my original post’s formatting got messed up due to my using less-than and greater-than symbols for the generic text strings in the words. TNA should have looked like TsomethingNA, etc. The “something” got interpreted as HTML. Oops!

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