FALSE PROPHETS Forecast Illusion

We get many predictions from around the globe daily. Many come true, many fall nearer, and many fail. ‘There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know

If these predictors are proven right then they get publicity but if they fail then there is no penalty to them. So, it’s a win-win approach for them. Thus, they are bombarded with lots of predictions.

Investment – We get many tips on a routine basis from the different analysts/agencies. If there does not have any penalties for failure then people keep on sending as many as possible predictions or tips. Any tips will hit the target and they become famous. As everyone remembers success, not failure. If their increments, incentives are based on how many times they achieve success so that they are remains in control.

But we do not know every time that is their tips providers have something to lose or not? So that we should not trust every coming prediction blindly. We need to study all the predictions with our knowledge and process before accepting them.

This entire series will be reviewed with various examples from books which are Thinking, Fast and Slow and The Art of Thinking Clearly.