This is a dialog between the celebrated Nassim Nicholas Taleb and Justin Rowlatt about Exchanges: The Global Economy.
“Do you underestimate the risk you are under? Nassim Nicholas Taleb’s ideas on probability and risk challenge assumptions made by markets and mathematicians all of over the world. His ideas on our blindness to the impact of improbable events have lead him to be described as a ‘super hero of the mind’ and ‘the hottest thinker in the world’. He is the author of the mega-selling books on randomness and the impact of the improbable on life and on economics – Black Swan and Anti-Fragile. His official title is Distinguished Professor of Risk Engineering at New York University and he continually ranks as one of the most influential people on the planet. He joins Justin Rowlatt and an audience at the Grand Amphitheatre of the Sorbonne in Paris for a special event, staged in partnership with Paris Dauphine University.”
So what is prediction?
It is indeed unwise to predict the future. It just isn’t possible. Our traditional ideas of probabilities to ascertain risk is flawed. So the question ‘When something is going to happen?’ is pretty useless.
It does not serve any purpose predicting the past. It is only trying to answer the question ‘Why?’. When done, it is only a story with no certainty of being right.
Then is there any use of prediction?
Possibly yes, when we ask, ‘What is happening now?’ The future is unfolding now. The incipient seeds of the future have already taken roots in the now. Those give the clues. So it is useful to check what is happening right now.
But how do we look at it? Do we do it by thinking? There seems to be very little scope of doing so.
So do we frame a story? That could turn out to be a myth.
The only plausible way is to ‘observe’ or see or notice the present. Then only we have the chance to ‘see’ the future. In other words ‘predict’ it, even if it is a potential ‘black swan’.
Hence the most important question to predict anything is to ‘see’ what is happening now and not ask why something has happened or when something is going to happen.
That is the best way we can predict anything and remain useful.