Michael Mauboussin: How To Improve Your Forecasting Ability

Philip E. Tetlock and Dan Gardner’s book, Superforecasting: The Art and Science of Prediction is a study of forecasting and warning for investors. The book looks at the results of 27,000 predictions made by 284 experts on political, social, and economic outcomes over a 21-year span ended in 2004. And based on this data, Tetlock, along with his colleagues found that the average prediction was “little better than guessing.” Anyone that’s been following Wall Street analysts’ projections for an extended period, will surely agree with this view as stories like this are all too common: “In early October of 2013,…