Black Swan by Nassim Talib covers the topic of predicting the future when it is chaotic an opaque. People often foolishly believe they have much more control over the future than they actually have.
When compensating the performance of people predicting highly random events it is important to note that pure chance may have more of an influence than skill. Individuals will take very small snippets of information and construct beautiful idealized theories that utterly fail to predict reality.
Black swan events cover things with a low probability of occurring but with a big impact. These events are difficult to predict. I was fortunate enough to anticipate the need for a back up power supply for the sump pump in my house. Roughly once in every five to ten years a strong rainstorm will cause the power to go out and I was fortunate to be able to run the sump on back up battery power. I had purchased the back up unit approximately 5 years ago for just that event. If I had used evidence from the past three years when we had no loss if power I would have had a wet basement.
The misuse of mathematics to predict the future in a random unpredictable world is fraught with problems. It is also easy to fall in love with a theory and to cherry pick evidence for it.
Evidence based medicine when properly applied is a way of getting a better sense of the truth. I've watched cancer tests on research animals that have been very helpful in accurately predicting the efficacy of treatment regimes. Anecdotal evidence does not control for the random positive effects that occur and cause people to chase treatment options that may be harmful, useless or less helpful than a placebo.
Nassim does not suffer fools. He is in a position to call them out and speak truth to ignorance. I found the book to be refreshing and helpful in making decisions about predicting and unpredictable future. We need to assume that our assumptions about the status quo are wrong.
Black Swan - A book review (11 min)
Nassim Talib - Google book talks (60 min)
For further information about Nassim Talib go to his website Fooled by Randomness.
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