Superforecasting: The Art and Science of Prediction

by Philip E. Tetlock

“War cannot be conducted from the green table,” Moltke wrote, using an expression that referred to top commanders at headquarters. “Frequent and rapid decisions can be shaped only on the spot according to estimates of local conditions.”

This is black swan investing, and it’s similar to how Taleb himself traded—very successfully—before becoming an author. But it’s not the only way to invest. A very different way is to beat competitors by forecasting more accurately—for example, correctly deciding that there is a 68% chance of something happening when others foresee only a 60% chance. This is the approach of the best poker players. It pays off more often, but the returns are more modest, and fortunes are amassed slowly. It is neither superior nor inferior to black swan investing. It is different.

Wells hinted at a better way in his closing comment. If you have to plan for a future beyond the forecasting horizon, plan for surprise.