Friday, November 6, 2020

Ask The Expert?

The trouble with the world is that the stupid are cocksure and the intelligent full of doubt – Bertrand Russell

The last month was full of noise around the US elections. The expectation was a clean Biden win. The final result seems much closer. This was not the only major event that has not gone as per expectations. Some more to consider –

Trump got elected

Brexit happened

Covid predictions and their flip flops

World oil demand was supposed to outstrip oil supply in 2000’s

War ravaged Japan and Germany were not supposed to come back from ruins so soon

World was also supposed to run out of food in 1960’s

The most widely held and tracked large stocks see wild swings on result days

You see the world of making predictions is full of pitfalls. Experts are supposed to know. We depend on their knowledge and feedback. Maths and Physics are comparatively straightforward – the equations produce the same results every time. However in most other fields the outcome is based on everything else being the same. The problem is that everything else is never the same. It may be similar but not the same and there is a big difference between the two. That why history rhymes and does not repeat.

Very often the outcomes are a range of probabilities. Probabilities are never 0 or 100 and the range between those numbers is wide enough to have a huge impact on the end result. Behavioral science is not an exact science. Behaviours change. Sentiments change. Breakthroughs happen to solve impossible looking problems.

The noise around events will only increase with each passing day so how can one be better prepared? Part of the solution is having an open mind and a flexible approach, helps in re-calibrating our views when required. Part is acknowledging that one will never fully know. Part is assigning realistic probabilities. With experience one starts planning for a range of outcomes so that even the worst case is not unexpected or ruinous.

In reality, no one knows, for sure. Keeps things interesting 😊