Global macro investing provides unique uncorrelated return opportunities within a diversified portfolio. This blog focuses on current economic and finance issues, changes in the market structure and the hedge fund industry as well as how to be a better disciplined decision-maker in the global macro / managed futures space.
Monday, October 10, 2011
Experts and doubt
"The commanding general is well aware the forecasts are no good, however, he needs them for planning purposes"- story from Kenneth Arrow from his experience in WWII about the response when he suggested the weather forecasts were poor.
Science is the belief in the ignorance of experts.
"What is Science?", presented at the fifteenth annual meeting of the National Science Teachers Association, in New York City (1966) published in The Physics Teacher Vol. 7, issue 6 (1969)
The prediction business is difficult. we place our faith in experts because they can tell us many facts about a specific investment subject, but fact telling is not the same as forecasting. Fact telling should not be the basis for measuring the success of a forecasts. It should only be caste in results. However, there has to be a higher standard for success for someone who is not an expert and does not have command of the facts.