Warren Hatch

Thank you, Lynn. It's a pleasure to be here. Thanks for having me on.

Thank you, Lynn. It's a pleasure to be here. Thanks for having me on.

In a sense, every decision that we make is a forecast because we're going to be taking action and doing things to improve the odds that we're going to get our desired outcome, whatever that might be. So we're doing that all day, all week, all year long, or thousands of decisions that way. So we want to make the best possible forecast.

In a sense, every decision that we make is a forecast because we're going to be taking action and doing things to improve the odds that we're going to get our desired outcome, whatever that might be. So we're doing that all day, all week, all year long, or thousands of decisions that way. So we want to make the best possible forecast.

And super forecasting is a process to get to the best possible forecast and therefore to get to the best possible decision.

And super forecasting is a process to get to the best possible forecast and therefore to get to the best possible decision.

Well, most people, and it's the dominant way, is they'll use language to express their views about the future. Somebody will ask them, well, do you think this will happen? And they'll say, well, maybe, maybe it will. Or they'll use fancier words like, well, there's a possibility or a distinct possibility. Now, here's the problem with that, many problems.

Well, most people, and it's the dominant way, is they'll use language to express their views about the future. Somebody will ask them, well, do you think this will happen? And they'll say, well, maybe, maybe it will. Or they'll use fancier words like, well, there's a possibility or a distinct possibility. Now, here's the problem with that, many problems.

One problem is we're all going to understand that in different ways. There is a famous example when Kennedy came into office and inherited a plan to invade Cuba and topple the regime. He asked his advisors, will this succeed? And they said, there's a fair chance it will succeed. Now, it turns out Kennedy had in mind north of 50%. The analysts had in mind something more like 25%.

One problem is we're all going to understand that in different ways. There is a famous example when Kennedy came into office and inherited a plan to invade Cuba and topple the regime. He asked his advisors, will this succeed? And they said, there's a fair chance it will succeed. Now, it turns out Kennedy had in mind north of 50%. The analysts had in mind something more like 25%.

By using language, there was noise in that decision process. I imagine if Kennedy had known they had in mind 25%, history might have been a little different. So that is true for all kinds of words like that, where we're going to interpret it differently. Another bad thing about it is that it straddles for the 50-50 line. So if it happens, you say, aha, I said there'd be a distinct possibility.

By using language, there was noise in that decision process. I imagine if Kennedy had known they had in mind 25%, history might have been a little different. So that is true for all kinds of words like that, where we're going to interpret it differently. Another bad thing about it is that it straddles for the 50-50 line. So if it happens, you say, aha, I said there'd be a distinct possibility.

If it doesn't, well, I only said it was a distinct possibility. One other bad thing about it is it's impossible to put different views together. You can't crowdsource language like that because we're all using different words and in different ways. How much better to use a number? We all know what 72% is. We all know what that means.

If it doesn't, well, I only said it was a distinct possibility. One other bad thing about it is it's impossible to put different views together. You can't crowdsource language like that because we're all using different words and in different ways. How much better to use a number? We all know what 72% is. We all know what that means.

That's a great question, because sometimes there's an apparent tension between experts and good forecasters. where it's one is better than the other. We really are of the view that you want both. You want hybrid models when it comes to experts and things like that. And one core reason for that is experts might be good forecasters. But we don't know that until we see their track record.

That's a great question, because sometimes there's an apparent tension between experts and good forecasters. where it's one is better than the other. We really are of the view that you want both. You want hybrid models when it comes to experts and things like that. And one core reason for that is experts might be good forecasters. But we don't know that until we see their track record.

Just being an expert does not make you a good forecaster. We want to see if when you say an 80% probability of something occurring, it occurs eight times out of 10 and doesn't two times out of 10. That's accuracy in a probabilistic sense. Most experts do not go through that process.

Just being an expert does not make you a good forecaster. We want to see if when you say an 80% probability of something occurring, it occurs eight times out of 10 and doesn't two times out of 10. That's accuracy in a probabilistic sense. Most experts do not go through that process.

They're very good at telling us what we need to understand, how we got where we are, some of the things we might want to watch. going forward. But what we've seen time and again, when you ask them for a probabilistic forecast, experts generally tend to assign higher probabilities to events in their area of expertise than actually occur.

They're very good at telling us what we need to understand, how we got where we are, some of the things we might want to watch. going forward. But what we've seen time and again, when you ask them for a probabilistic forecast, experts generally tend to assign higher probabilities to events in their area of expertise than actually occur.