History, Predictions, World Cup & Taleb
I read an amusing argument in a World Cup news section of some paper - "Since 1962, European teams & Latin American teams have won the world cup alternately. Going by that logic, it'll be Brazil or Argentina this time" .. About 2 - 3 years, I might have been swayed by these kind of arguments, however, after reading Nassim Nicholas Taleb's Fooled by Randomness , I tend to be amused by these kind of predictions.. There are different kind of predictions. One type of predictors just give out their bets / premonitions..Second one, you just do a set of data analysis, find some pattern and make your bet based on that..If you win, you tend to develop a self-belief in your logic, which might not have any rational basis.. You never tend to realize that you have made a correct bet just out of randomness, rather than any strength in the underlying logic.. A lot of stock market bets are again like that..You tend to observe a set of past events , make some generalizations ...