Thursday, January 16, 2014

Review: The Signal and the Noise, by Nate Silver

The Signal and the Noise: Why So Many Predictions Fail — but Some Don't, by Nate Silver.

Amazon link.

Do you know what Bayesian thinking is? It's a specific formula for figuring out how to predict something. Nate Silver has an interesting background, having tried professional gambling, and doing political forecasting at I liked the variety, and examinations of how hard some things (like the stock market) are to predict, and how bad we are at estimating how well we predict things. Most people can't predict the stock market, but I can! 

Thinking hard about how likely an event is lets you take new information into account to update your prediction, using a Bayesian method. I need to learn that formula...


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