Are you a superforecaster? I’m not

But I know of one who is!  Philip E Tetlock, and colleague Dan Gardner, are the authors of the book ‘Superforecasting: the Art and Science of Prediction’ published by Cornerstone Digital in 2015.  A Toronto-born academic, he works at the intersection between political forecasting, social science, psychology, organisational behaviour and decision making.

He started in 1984 by organising small-scale forecasting tournaments using 284 experts in various fields; by 2003 he had decided that those with the highest media profiles often had the worst results, and concluded there was a perverse inverse relationship between fame and accuracy.

In 2011 he started the Good Judgement Project (GJP) with his psychologist wife Barbara Mellers and Don Moore, a specialist in over-confidence; they aimed at harnessing the wisdom of crowds.  The 3000 volunteers only needed an interest in current affairs and an internet connection; then each forecaster’s predictions were tracked and scored.  They picked the 60 most accurate and found that they beat the professionals by a wide margin.  Tetlock concluded that ‘it doesn’t really matter how smart you are’, as recorded in an interview in Lunch with the FT (9/10 July 2016).

They then started grouping the traits these people had, which made them super forecasters.  These, summarised by Matthew Russell of M&G (https://www.bondvigilantes.com/blog/author/matthewrussell/), are as follows:

The ability to aggregate information from multiple sources.

Moderately intelligent and numerate.

Curious, with an appetite for information.

Open mindedness.

A healthy amount of cynicism.

They updated their forecasts regularly.

They were unafraid the change their minds.

They were humble.

Tetlock himself says that estimating the probability of unique events is a skill that can be, and is worth, cultivating.  Just the sort of thing a professional trader is doing all the time.

Now as for the traits that help, I think there are one or two that I have to work on.  I also know who ought to be more humble!

Another (slightly off-piste) book for the STA Library, maybe?

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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