Rules for Effective Forecasting by Paul Saffo

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Tomanyiron
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Joined: Mon Apr 26, 2010 6:39 am

Rules for Effective Forecasting by Paul Saffo

Post by Tomanyiron »

Six Rules for Effective Forecasting by Paul Saffo
https://hbr.org/2007/07/six-rules-for-e ... orecasting
“There is a tendency to over-estimate the short term and under-estimate the long term. Our hopes cause us to conclude that the revolution will arrive overnight. Then, when cold reality fails to conform to our inflated expectations, our disappointment leads us to conclude that the hoped-for revolution will never arrive at all—right before it does.” Paul Saffo paraphrasing Roy Amara

I found his type of psychosophy very applicable to the TSP investing, and all market investing as a mater of fact. It sounds so much like just common sense, it makes me wonder why was it not obvious all along.

• “Prediction is possible only in a world in which events are preordained and no amount of action in the present can influence future outcomes.”
• “Unlike a prediction, a forecast must have a logic to it. That’s what lifts forecasting out of the dark realm of superstition. The forecaster must be able to articulate and defend that logic.”
• “Hold Strong Opinions Weakly. One of the biggest mistakes a forecaster—or a decision maker—can make is to over-rely on one piece of seemingly strong information because it happens to reinforce the conclusion he or she has already reached. Having strong opinions gives you the capacity to reach conclusions quickly, but holding them weakly allows you to discard them the moment you encounter conflicting evidence.”
• “In forecasting, lots of interlocking weak information is vastly more trustworthy than a point or two of strong information.”
• “It is a liability for forecasters to have too strong a proclivity to see change, for the simple fact is that even in periods of dramatic, rapid transformation, there are vastly more elements that do not change than new things that emerge.”
• “As a decision maker, you ultimately have to rely on your intuition and judgment. There’s no getting around that in a world of uncertainty. But effective forecasting provides essential context that informs your intuition. It broadens your understanding by revealing overlooked possibilities and exposing unexamined assumptions regarding hoped-for outcomes. At the same time, it narrows the decision space within which you must exercise your intuition.”
• “Change rarely unfolds in a straight line. The most important developments typically follow the S-curve shape of a power law: Change starts slowly and incrementally, putters along quietly, and then suddenly explodes, eventually tapering off and even dropping back down again.”
"A good decision is based on knowledge and not on numbers." Plato
"Perfect numbers like perfect men are very rare." Rene Descartes

Duval
Posts: 19
Joined: Mon Dec 19, 2016 1:12 am

Re: Rules for Effective Forecasting by Paul Saffo

Post by Duval »

Interesting...thanks.

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