My Take | Why we keep making bad predictions but never learn from them
- What started off as an evolutionary advantage can cloud your judgment and decision-making about the future when it comes to the complex political, social and economic worlds
Many or perhaps most of us are so bad at making predictions we might as well stop trying and just toss the coin.
I have started doing just that with my stock investment after almost two decades of trying to analyse the market, with truly pathetic results. After all, if you don’t play complicated derivatives, you are just faced with the binary choice of stock prices going up or down, nothing a coin toss can’t take care of to make a decision for you.
But while I may be an exceptionally bad investor, I don’t think I am the only one when it comes to making poor predictions about binary outcomes.
A “yellow ribbon” YouTube commentator with probably the biggest online following in Hong Kong – he has “escaped” to Taiwan – is notorious for consistently making the wrong predictions, so much so that people joke about using him to make contrarian bets.
He prognosticated with much conviction that Hillary Clinton would win the US presidency. Four years later, he forecast a second term for Donald Trump. He predicted calamity and even collapse for the Chinese communist state when the Covid-19 pandemic first started, but there would be no mass outbreak in Europe, let alone the United States.