Would you trust an inveterate gambler, sports nut and beer enthusiast with significant predictions about the near-term future?
After finishing the signal and the noise by Nate Silver its easy to see why.
If you love numbers, statistics, and predictions (and I certainly do) you'll enjoy this read. Mr Silver discusses in some detail why so many assumed truths and rules of thumb don't work. And sometimes do.
At a time when Big Data is all the rage with people using the phrase tritely and inaccurately the author crystalizes our dilemma: we generate 2.5 quintillion bytes of information per day – how much of it is useful? As he points out early on, there really is nothing new under the sun – we've just found new ways of packaging and presenting it a la Big Data.
This work is all about separating the “signal” – i.e., what has real value – from the “noise” – extraneous pieces of data that float all around us. Disciples of total quality will understand this line of reasoning: looking for the critical few and separating out the trivial many.
Human nature is the underlying subject here. Why do some people – perhaps most – continue to get more and more confident with predictions even though their track record is no better than random guessing. What is the difference between a forecast and a prediction? What is an unknown unknown?
Read this book.
Some of the things I found interesting as a numbers junkie was Nate's concept of predictions not as being right, but rather being less and less wrong over time. Think about that in the context of the 10,000 hour heuristic and it begins to make sense.
Importantly the author asks us to become comfortable with thinking probabilistically and developing a range of possible outcomes as opposed to a fixed number. In short, to become comfortable with uncertainty.
Signal and the Noise is a work that will have to stay on your shelf for reference: the concepts are not so much difficult as they are new and as such it will take time to integrate skill in using them. But if you enjoy looking at trends and projections and attempting to discern intelligent meaning from them, then this book is for you. Especially if you don't mind being apart from – perhaps ahead – of the mainstream.
An absolute must read.