Link :Amazon, Goodreads. Price: £9.40
Predicting the future – from whether it will rain today to whether we should cross the road – is an essential part of our everyday life. Yet, as a rule, we are exceptionally bad at it, and routinely fail to foresee hugely significant events. In this book Nate Silver, the man who successfully predicted the results in every state for the 2008 US Presidential Elections, explores and explains the art of prediction, visiting hundreds of experts to learn from their techniques and how we can consistently be less wrong.
This is an important book. If you don’t know what Bayes Theorem is (reasonable) and can’t apply it (also reasonable) it is an essential book. In the first half, Silver works step by step through why we so often make incorrect predictions and most importantly presents a methodology that will help you more accurately guess the causes of events or the outcomes of your actions. This is Bayesian rationality, and Silver provides one of the clearest applied explanations I have ever seen.
There is a small amount of maths that is useful to know to get the most from this book. First of all, you need to be able to manipulate percentages (if you roll a 6-sided dice twice, what is the chance you get a 1 at least once? How about a 1 on both throws)? Secondly, some simply algebra. If you can’t do this much maths, please, please, for the love of the better life you could be living, get yourself down your local FE college or library and sign up for a basic maths course. A tiny bit of statistics will go a long way to helping you make better decisions.
In the second half of the book Silver presents in detail several examples of where prediction science has struggled, from catastrophic failure to unrecognised success, including earthquakes, 9/11, the financial crisis and the poker bubble. By the end you should have a clear idea of why Bayesian rationality is so important. Read it properly, internalise Bayesian rationality, and this book will change your life.
