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.
Is every healthy child a potential prodigy? ... Before Laszlo Polgár conceived his children, before he even met his wife, he knew he was going to raise geniuses. He’d started to write a book about it. He saw it moves ahead. ... By their first meeting, a dinner and walk around Budapest in 1965, Laszlo told Klara, his future bride, how his kids’ education would go. He had studied the lives of geniuses and divined a pattern: an adult singularly focused on the child’s success. He’d raise the kids outside school, with intense devotion to a subject, though he wasn’t sure what. "Every healthy child," as he liked to say, "is a potential genius." Genetics and talent would be no obstacle. And he’d do it with great love. ... Computers have long since outclassed humans in chess; they’re vital in training, but their recommended moves can seem quixotic. "No, it’s very human," Polgár assured them. The students, most of them grandmasters, grew quiet, searching the more than 100,000 positional situations they had ingrained over their lifetimes, exploring possible moves and the future problems they implied — moving down the decision tree. It’s the knot at the heart of chess: Each turn, you must move; when you move, a world of potential vanishes. ... "It’s important to look at top performers to look at the limits of human abilities — the maximum adaptations people can undergo." By looking to the best, we can understand the rest.
Cheese-rolling. Pole-vaulting. Wife-carrying. Figure skating. Cup-stacking. Bobsledding. Ferret-legging. Golf. Somewhere someone right now is endeavoring to become more proficient at every one of these activities. Half the sports on that list are imbued with the prestige and promise of an Olympic medal, but is there anything more intrinsically worthy about performing a triple salchow than there is about keeping an angry ferret inside your trousers for two minutes? ... The upcoming Summer Olympics from Rio de Janeiro will feature 306 different events in 42 sports, or so the official Rio2016.com site tells us. But how many of those sports, such as synchronized swimming or equestrian events, do you consider a sport?
At its peak last summer, a daily fantasy get-rich-now commercial aired every 90 seconds on television. Combined, industry leaders FanDuel and DraftKings plunged more than $750 million into TV commercials, radio spots, digital ads and other promotions. In the weeks leading up to the 2015 NFL season, the two startup companies spent more on advertising than the entire American beer industry. ... Daily fantasy's meteoric rise -- breathtaking for its breakneck speed, avalanche of investors' cash and ever-spiraling valuations -- spurred the two companies' endlessly annoying, record-shattering arms race for new customers and industry dominance. ... The two companies processed a combined $3 billion in player-entry fees in 2015. ... as quickly as it boomed, the industry bottomed. One year after their headiest moments, FanDuel and DraftKings are still not profitable. Both privately held companies' valuations have been sliced -- by more than half, according to some estimates. The companies have hemorrhaged tens of millions of dollars in legal and lobbying expenses. (DraftKings' attorneys fees once ran as high as $1 million per week.) And the fog bank of the industry's uncertain future has made it nearly impossible for either company to raise new money.
This problem has a name: the paradox of automation. It applies in a wide variety of contexts, from the operators of nuclear power stations to the crew of cruise ships, from the simple fact that we can no longer remember phone numbers because we have them all stored in our mobile phones, to the way we now struggle with mental arithmetic because we are surrounded by electronic calculators. The better the automatic systems, the more out-of-practice human operators will be, and the more extreme the situations they will have to face. ... The paradox of automation, then, has three strands to it. First, automatic systems accommodate incompetence by being easy to operate and by automatically correcting mistakes. Because of this, an inexpert operator can function for a long time before his lack of skill becomes apparent – his incompetence is a hidden weakness that can persist almost indefinitely. Second, even if operators are expert, automatic systems erode their skills by removing the need for practice. Third, automatic systems tend to fail either in unusual situations or in ways that produce unusual situations, requiring a particularly skilful response. A more capable and reliable automatic system makes the situation worse. ... The rarer the exception gets, as with fly-by-wire, the less gracefully we are likely to deal with it. We assume that the computer is always right, and when someone says the computer made a mistake, we assume they are wrong or lying. ... For all the power and the genuine usefulness of data, perhaps we have not yet acknowledged how imperfectly a tidy database maps on to a messy world. We fail to see that a computer that is a hundred times more accurate than a human, and a million times faster, will make 10,000 times as many mistakes. ... If you occasionally need human skill at short notice to navigate a hugely messy situation, it may make sense to artificially create smaller messes, just to keep people on their toes.
A dual education system that incorporates vocational training and classroom learning could provide young people with more options in their transition into the working world. We think that engaging employers in the design and delivery of apprenticeship frameworks is the key to preventing skill mismatches. ... Changing employers’ perceptions of youth and encouraging early engagement in schools could increase youth employability and information around career options. This could include work experience, career advice, mentoring, and youth-led social action. ... Reducing informal recruitment methods and use of qualifications as filters could reduce work barriers to engage with youth from low socio-economic backgrounds who may be at risk of anti-social behavior.
As the longest-running longitudinal survey of intellectually talented children, SMPY has for 45 years tracked the careers and accomplishments of some 5,000 individuals, many of whom have gone on to become high-achieving scientists. The study's ever growing data set has generated more than 400 papers and several books and provided key insights into how to spot and develop talent in science, technology, engineering, mathematics (STEM), and beyond. ... the work to identify and support academically talented students has raised troubling questions about the risks of labeling children and the shortfalls of talent searches and standardized tests as a means of identifying high-potential students, especially in poor and rural districts.
In rich countries the link between learning and earning has tended to follow a simple rule: get as much formal education as you can early in life, and reap corresponding rewards for the rest of your career. The literature suggests that each additional year of schooling is associated with an 8-13% rise in hourly earnings. ... Many believe that technological change only strengthens the case for more formal education. Jobs made up of routine tasks that are easy to automate or offshore have been in decline. The usual flipside of that observation is that the number of jobs requiring greater cognitive skill has been growing. ... The reality seems to be more complex. The returns to education, even for the high-skilled, have become less clear-cut. Between 1982 and 2001 the average wages earned by American workers with a bachelor’s degree rose by 31%, whereas those of high-school graduates did not budge, according to the New York Federal Reserve. But in the following 12 years the wages of college graduates fell by more than those of their less educated peers. Meanwhile, tuition costs at universities have been rising. ... automation tends to affect tasks within an occupation rather than wiping out jobs in their entirety. Partial automation can actually increase demand by reducing costs
- Also: The Economist - Cognition switch: What employers can do to encourage their workers to retrain < 5min
- Also: The Economist - Old dogs, new tricks: How older employees perform in the workplace < 5min
- Also: The Economist - The return of the MOOC: Established education providers v new contenders < 5min
- Also: The Economist - Pathway dependency: Turning qualifications into jobs < 5min
- Also: The Economist - The elephant in the truck: Retraining low-skilled workers < 5min
- Also: The Economist - Manufacturing industry: Politicians cannot bring back old-fashioned factory jobs 5-15min
Investors are shifting their investment allocations from active to passive management. This trend has accelerated in recent years. The investors who are shifting from active to passive are less informed than those who stay. This is equivalent to the weak players leaving the poker table. Since the winners need losers, this can make the market even more efficient, and hence less attractive, for those who remain. If you can’t identify the patsy, or weak player, it’s probably you. ... Passive management has lower costs than active management and hence delivers higher returns per dollar invested than active management does in the aggregate. However, passive management introduces the possibility of market distortions, including crowding and illiquidity. Exchange-traded funds, in particular, are worth watching closely because of their explosive growth and high trading volume. ... Four drivers have led to the development of the mutual fund industry and, more recently, to the shift toward passive investing. These include regulation, the market environment, technology, and the balance between informed and uninformed investors.