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We Study Billionaires - The Investor’s Podcast Network

TIP146: Superforecasting - The Art and Science of Predicting (Business Podcast)

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.63.6K Ratings

🗓️ 8 July 2017

⏱️ 41 minutes

🧾️ Download transcript

Summary

In this episode, Preston and Stig read a book that was recommended to them by legendary investor Edward Thorp. The book is titled, "Superforecasting" by Philip Tetlock and Dan Gardner.


In this episode, you'll learn:

  • The right framework for making correct forecasts
  • How to prevent confirmation bias for your investments
  • Why financial experts are storytellers rather than forecasters
  • How and why the best investors constantly change their opinion 

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Transcript

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0:00.0

You're listening to TIP.

0:03.0

So a few months ago, we had a huge name and finance on our show.

0:07.0

And the gentleman's name is Ed Thorpe.

0:10.0

And Ed Thorpe, his personal net worth, is around $900 million.

0:15.0

And during our discussion, I was talking to Ed Thorpe about certain ideas about what might happen in the future,

0:21.0

particularly about central banking.

0:24.0

And I asked Ed a really difficult question,

0:27.0

and I was kind of expecting him to tell me,

0:29.0

yeah, I think there's a high probability that that might be the case with respect to central banks.

0:34.0

And what I got back from him was kind of an interesting response.

0:38.0

Ed basically said to me, I have no idea.

0:41.0

And he responded so quickly without any hesitation that it just shocked me.

0:46.0

And during that interview, Ed said, you know, you really got to read this book called Super Forecasting

0:52.0

by Philip Tetlock and Dan Gardner.

0:55.0

And because of that interview and because of that moment that I experienced with Ed Thorpe

1:00.0

and how he responded to this question about forecasting.

1:04.0

And then he recommended this book for us to read.

1:07.0

That's why we decided to do this episode today on Super Forecasting.

1:12.0

And everyone really forecast whether about it's the weather,

1:15.0

beating the morning traffic or it's the financial markets.

1:19.0

And while forecasting might appear to be a game,

1:22.0

it's in fact very real and the stakes are high and substantial.

...

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