Poor Economists

I have been reading The Black Swan, OK I don't actually read I listen to people talking while shooting lasers at cells but I am fairly convinced it is the same thing. Anyways one of the points this book is making is that there simply are not experts in many fields. Put another way if I walk into the stock market and buy stocks at random I will not do significantly worse than someone with a decade of experience in the field. The same is true in most fields that do not do repeatable experiments. Economic forecasts may as well use astrology for how poor their predictions are. It is pretty amazing how many articles I am now seeing that connect exactly to what this book is saying. For example slate.com has an article today about why economic forecasters are so wrong, so often. Risk managers are another group that really do not do terribly well. Because we can't predict the economic state in the near future, it is impossible to be really certain of the risks we face on an investment, or a bar fight. The economy may pull out a knife and attack that part of the economy we felt was the lowest in risk. The economist has an interesting related article today.

Judging by his reputation I suspect his other book, Fooled by Randomness is nearly as good. Although I suspect he will occasionally make a fool of him self by talking about topics he knows nothing about just like he does in this book. That is a hard problem to avoid when you try to write a book about everything.