Howard Marks – The Most Important Thing

Continue reading Howard Marks – The Most Important Thing


The Wisdom of Charlie Munger

Continue reading The Wisdom of Charlie Munger

How to Forecast an Election

The reason why a Trump victory was such a surprise was because of the overconfidence that spectators had in electoral forecasting models and polling data. For example, because of things like 538’s electoral forecasting “the market” was predicting almost a guaranteed Clinton victory. However, Taleb frequently put out there that there were serious flaws with these forecasting methodologies.

Despite the fact that Nate Silver’s 538 had slightly more bearish probabilities than things like the New York Times there is no doubt that 538’s Bayesian approach was extremely fragile to new new data i.e. poor out of sample performance. Just to pick on 538 here, as Nate’s work gained the most publicity, the below diagram shows 538’s updating relative to how Taleb’s model captures how updating should perform.

Continue reading How to Forecast an Election