FiveThirtyEight - Can An Astrophysicist Change The Way We Watch Sports? 5-15min

Matt Ginsberg’s training is in astrophysics. He got his Ph.D. from Oxford when he was 24 years old. His doctoral advisor there was the famed mathematical physicist Roger Penrose, and he recalls rubbing elbows with the academic rock stars Stephen Hawking and the late Richard Feynman. He created an artificial intelligence crossword puzzle solver called Dr. Fill and a computer bridge world champion called GIB. ... Unsurprisingly, there’s pretty heavy math involved to make this real-time sports predictor work. For one element of the system’s calculations, Ginsberg sent me a pdf with eight dense pages of physics diagrams and systems of equations and notes on derivations. It uses something called the Levenberg-Marquardt algorithm. It requires Jacobians and the taking of partial derivatives and the solving of quartics, and code efficient enough to calculate it all up to the split second. If predicting the future were easy, I suppose everybody would do it. ... One thing this project can’t predict, however, is its own future. Its uses are, so far, largely speculative, and cashing in on a minor superpower might not be easy. Even gamblers who bet during play would struggle to make much money from a half-second heads-up that a shot is going in. But Ginsberg’s system would find a natural place in the long line of sports technologies that have been used for a singular end — TV.

CS - Sharpening Your Forecasting Skills: Foresight Is a Measurable Skill That You Can Cultivate > 15min

What if you had the opportunity to learn how to improve the quality of your forecasts, measured as the distance between forecasts and outcomes, by 60 percent? Interested? ... Phil Tetlock is a professor of psychology and political science at the University of Pennsylvania who has spent decades studying the predictions of experts. Specifically, he enticed 284 experts to make more than 27,000 predictions on political, social, and economic outcomes over a 21-year span ended in 2004. The period included six presidential elections and three wars. These forecasters had crack credentials, including more than a dozen years of relevant work experience and lots of advanced degrees—nearly all had postgraduate training and half had PhDs. ... Overall, Tetlock’s results provide lethal ammunition for those who debunk the value of experts. ... While famous experts had among the worst records of prediction, they demonstrated “skill at telling a compelling story.” To gain fame it helps to tell “tight, simple, clear stories that grab and hold audiences.” These pundits are often wrong but never in doubt. ... foresight is a real and measurable skill. One test of skill is persistence. High persistence means that you do consistently well over time and are not a one-hit wonder. About 70 percent of superforecasters remain in those elite ranks from one year to the next, vastly more than what chance would dictate. ... second is that foresight “is the product of particular ways of thinking, of gathering information, of updating beliefs.” Importantly, the essential ingredients of being a superforecaster can be learned and cultivated. ... Tetlock and his colleagues found four drivers behind the success of the superforecasters:
- Find the right people. You get a 10-15 percent boost from screening forecasters on fluid intelligence and active open-mindedness.
- Manage interaction. You get a 10-20 percent enhancement by allowing the forecasters to work collaboratively in teams or competitively in prediction markets.
- Train effectively. Cognitive debiasing exercises lift results by 10 percent.
- Overweight elite forecasters or extremize estimates. Results improve by 15-30 percent if you give more weight to better forecasters and make forecasts more extreme to compensate for the conservatism of forecasts.

Nautilus - The Last of the Earthquake Predictors 10min

In 1978, the United States Geological Survey (USGS) allocated over half its research budget ($15.76 million) to earthquake prediction, a level of spending that continued for much of the next decade. Scientists deployed hundreds of seismometers and other sensors, hoping to observe telltale signals heralding the arrival of the next big one. They looked for these signs in subterranean fluids, crustal deformations, radon gas emissions, electric currents, even animal behavior. But every avenue they explored led to a dead end. ... Since the early 20th century, scientists have known that large quakes often cluster in time and space: 99 percent of them occur along well-mapped boundaries between plates in Earth’s crust and, in geological time, repeat almost like clockwork. But after decades of failed experiments, most seismologists came to believe that forecasting earthquakes in human time—on the scale of dropping the kids off at school or planning a vacation—was about as scientific as astrology. By the early 1990s, prediction research had disappeared as a line item in the USGS’s budget. ... Defying the skeptics, however, a small cadre of researchers have held onto the faith that, with the right detectors and computational tools, it will be possible to predict earthquakes with the same precision and confidence we do just about any other extreme natural event, including floods, hurricanes, and tornadoes. The USGS may have simply given up too soon. After all, the believers point out, advances in sensor design and data analysis could allow for the detection of subtle precursors that seismologists working a few decades ago might have missed. ... At a time when American companies and institutions are bankrolling “moonshot” projects like self-driving cars, space tourism, and genomics, few problems may be as important—and as neglected—as earthquake prediction.

KKR - Time to Focus: Five Key Investment Themes 25min

Rising macroeconomic and geopolitical tensions are creating both opportunities and risks for global investors across the entire global capital markets. We continue to emphasize our five key macro themes, many of which we think can perform against a variety of economic backdrops. First, we believe that assets with Yield and Growth will continue to outperform. Second, we would avoid exposures linked to China’s structural slowing, though we do finally see some emerging investment opportunities in China’s ‘new’ export strategy. Third, we see the opportunity for a significant and potentially sustained upward revaluation in the securities of large domestically-oriented economies. Fourth, the dismantling of the traditional financial services industry has emerged as both a blessing and a curse for investors; we outline our approach for navigating this complicated segment of the global economy. Finally, given the bifurcation across markets that we are now seeing, we believe folks should consider increasing exposure to complex stories, including earnings misses, restructurings, and/or corporate repositionings; at the same time we would be selling simplicity in instances where future earnings streams appear over-priced.

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The New York Times - Why Isn’t the U.S. Better at Predicting Extreme Weather? 12min

Mass, who is 64, has become the most widely recognized critic of weather forecasting in the United States — and specifically the National Oceanic and Atmospheric Administration, which manages the National Weather Service and its underling agencies, including the National Centers for Environmental Prediction, where the nation’s weather models are run. Mass argues that these models are significantly flawed in comparison with commercial and European alternatives. American forecasting also does poorly at data assimilation, the process of integrating information about atmospheric conditions into modeling programs; in the meantime, a lack of available computing power precludes the use of more advanced systems already operating at places like the European Center for Medium-Range Weather Forecasts, based in Reading, England. And there are persistent management challenges, perhaps best represented by the legions of NOAA scientists whose innovations remain stranded in research labs and out of the hands of the National Weather Service operational forecasters who make the day-to-day predictions in 122 regional offices around the country. ... accuracy is everything, often the difference between life and death, given that extreme weather ... Industries like shipping, energy, agriculture and utilities lose money when predictions fail. Even slightly more precise wind-speed projections would help airlines greatly reduce fuel costs. ... the Weather Service interface was so primitive — the protocol was originally designed for the telegraph — it could only accommodate uppercase type.