Matt Glassman in Matt’s Five Points:
In 2016, Nate Silver was panned in the press and on social media for his presidential election forecast. His model gave Clinton a 71% chance of winning, and she lost. He and other forecasters totally missed the Trump phenomena; the polls were off and Trump was more popular than expected. For many people, the bloom was off the rose. Silver—who had so brilliantly predicted all the details of the 2008 and 2012 elections—got it wrong. He wasn’t infallible after all.
The catch is that it was actually a great forecast. The 29% chance Silver’s model gave Trump was significantly higher than most of the other prediction models—some of which gave Clinton as much as a 99% chance to win—and, crucially, much more bullish on Trump than public betting markets in gambling houses around the globe, which thought Trump had about a 17% chance to win. If you believed Silver’s model, it was a blaring siren to bet on Trump and against the conventional wisdom. Those who followed Silver’s advice got a massive return on their investment.
This analytical split—between people who saw Silver’s 2016 forecast as a huge miss and those who understood it as astute and financially lucrative—goes to the core of his fantastic new book, On the Edge: The Art of Risking Everything.
More here.
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