“Superforecasting, the Art and Science of Predicting” by Phillip Tetlock - the answer to Kahneman

I remember that neither Stig nor Preston were not entirely blown away by Daniel Kahneman’s ‘Thinking Fast and Slow’ but mainly because of the style and excessive detail but given both have discussed their own proclivity for anchoring, confirmation bias and other pitfalls that haunt us all, I’d suggest “Superforecasting, the Art and Science of Predicting” by Phillip Tetlock as a great read. I was a part of the good judgement project that made up a large part of the research for the book and the lessons and techniques derived from that project, which can be found in the book, are exceptional for catching those biases and mental pitfalls that we have when analyzing companies for example.

Phillip Tetlock has been a close collaborator with Daniel Kahneman for many years and his research was actually started because of a throw away line from Kahneman over lunch one day 20 years ago; notwithstanding however, Tetlocks work was still initially heavily critiqued by both Kahneman and Nassim Taleb who both posited that even if you were to bring these pitfalls to an analysts attention, there is little impact that this will have on an analysts performance and that they will still suffer from those pitfalls. In the last two years however Kahneman especially has modified his view in light of the research conducted for this book. Tetlock has managed to condense his training methods down into a 1 hour training model (included in the book) which has a significant impact on improving an analysts forecasting performance. His forecasting teams were able to beat the best CIA analysts 3 years in a row by margins of up to 50% simply by training his teams to recognize these tricks our brain sometimes play on us like substitution, anchoring, scoping biases and confirmation biases. While looking mainly at geopolitics and intelligence, the types of forecasting skills required by Tetlock’s teams are still directly relevant to the skills required in investing.

I’ve made this book required read for all new staff at my firm and I found it exceptionally easy to read. https://www.amazon.com/Superforecasting-Science-Prediction-Philip-Tetlock/dp/0804136718

I also found his Master Class series very practical and Daniel Kahneman is one of the many esteemed participants. https://www.edge.org/event/edge-master-class-2015-philip-tetlock-a-short-course-in-superforecasting
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