The Signal and the Noise

The Signal and the Noise

Why So Many Predictions Fail--but Some Don't

Book - 2012
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Human beings have to make plans and strategize for the future. As the pace of our lives becomes faster and faster, we have to do so more often and more quickly. But are our predictions any good? Is there hope for improvement? In this book the author examines the world of prediction, investigating how we can distinguish a true signal from a universe of noisy, ever-increasing data. Many predictions fail, often at great cost to society, because most of us have a poor understanding of probability and uncertainty. We are wired to detect a signal, and we mistake more confident predictions for more accurate ones. But overconfidence is often the reason for failure. If our appreciation of uncertainty improves, our predictions can get better too. This is the prediction paradox: the more humility we have about our ability to make predictions, and the more we are willing to learn from our mistakes, the more we can turn information into knowledge and data into foresight. The author examines both successes and failures to determine what more accurate forecasters have in common. In keeping with his own aim to seek truth from data, he visits innovative forecasters in a range of areas, from hurricanes to baseball, from the poker table to the stock market, from Capitol Hill to the NBA. Even when their innovations are modest, we can learn from their methods. How can we train ourselves to think probabilistically, as they do? How can the insights of an eighteenth-century Englishman unlock the twenty-first-century challenges of global warming and terrorism? How can being smarter about the future help us make better decisions in the present?
The author has built an innovative system for predicting baseball performance, predicted the 2008 election within a hair's breadth, and has become a national sensation as a blogger. Drawing on his own groundbreaking work, he examines the world of prediction.
Publisher: New York : Penguin Press, 2012.
ISBN: 9781594204111
159420411X
Characteristics: 534 p. : ill. ; 25 cm.

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geezr_rdr Feb 04, 2014

This is a worthwhile book for those who would like a basis for skepticism about the information we get from news programs, although it could have been more concise. The most valuable chapter deals with the Bayes approach to making and updating predictions. If you can multiply, divide, add and subtract, you can use this formula as he directs. There is an error in the graphs on page 357 in that the grey areas represent "individual investors".

voisjoe1 Nov 18, 2013

Nate Silver, who clashed with TV Republican political pundits on TV prior to the 2012 presidential elections, predicted correctly all 50 states in 2012, demonstrating that their opinions were political bluster rather than intelligent dialogue. In 2008, Silver correctly predicted 49 of 50 states, giving him a 0.990 batting average, whereas political pundits such as Peggy Noonan and Joe Scarborough were sent back to the minor leagues. In this book, Silver discusses how probability and statistics can be used to study such phenomena as earthquakes, climate change, poker, chess, terrorism, and financial bubbles, among other phenomena. This would be a good book for economists, business majors (including sports management), mathematicians, engineers and scientists (including political science). In fact, maybe this should be required reading for such majors. I was hoping Nate would describe some of his political predicting methods, but maybe he is saving that for his next book.

Jane60201 Sep 19, 2013

I expected the book to be about politics and was pleasantly surprised about the variety to topics covered. An extremely interesting book which kept my attention the entired way through.

w
writermala
Apr 22, 2013

An interesting, well-written book but I found it wasn't as user-friendly as I expected. It seemed to me that a lay person couldn't grasp all the concepts Silver had stated and explained.

Having said that I have to concede that this might well be the starting point for many of us to dig deeper and try to learn the statistics and Math involved in predictions.

I liked the way Silver explained the difference between risk and uncertainty and predictions and forecasts. All in all an eminently readable book.

johnf108 Dec 30, 2012

An excellent analysis of how we get mis-led by predictions of so called experts---like pundits and TV weathermen---and how they deceive themselves or purposely distort their forecasts to get noticed.
A must read for any academic in almost any field and anyone else who wants to see how they can get mis-led and how to question what you read/hear.

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