My rating: 4 of 5 stars
Length: 534 pages
Release date: 24 April 2013
Every time we choose a route to work, decide whether to go on a second date, or set aside money for a rainy day, we are making a prediction about the future. Yet from the financial crisis to ecological disasters, we routinely fail to foresee hugely significant events, often at great cost to society.
In The Signal and the Noise, the New York Times political forecaster Nate Silver, who accurately predicted the results of every single state in the 2012 US election, reveals how we can all develop better foresight in an uncertain world. From the stock market to the poker table, from earthquakes to the economy, he takes us on an enthralling insider’s tour of the high-stakes world of forecasting, showing how we can use information in a smarter way amid a noise of data – and make better predictions in our own lives.
The trouble with writing nonfiction books about semi-specialised subjects is that it’s easy to fall into pitfalls on either side: On one end, make your book too technical, and nobody will read it because the average layman can’t make heads or tails of it. On the other, “dumb it down” to a level that’s readable by any 12-year-old, and you open yourself to the criticism of peddling oversimplified pop science. The Signal and the Noise skilfully treads the delicate line between the two, presenting ideas in an accessible, easily understood manner while still conveying a fair deal of substance.
I don’t think I’ll ever not be a fan of Nate Silver. Here, his writing’s not only clearly and succinct, but has a witty tone without which the subject matter would be an order of magnitude less interesting. It also helps that he illustrates his points with a bunch of real-world examples from all disciplines, not just politics and sport as one might mistakenly be led to believe (although specific questions in both of these fields are indeed covered). Here we have topics explored from plague infection models to artificial intelligence in chess and everybody’s favourite, poker probabilities. (You may not know, as I certainly didn’t before reading, that Silver was himself a professional poker player at one point, with final profits totalling $400,000.)
The book frequently refers to Bayesian thinking in lieu of frequentist methods or, god forbid, gut feeling, as a cornerstone of good forecasting. While the maths of Bayes’s Theorem can get quite complicated, Silver sticks to the basics: X, a “prior probability” representing one’s initial beliefs of how likely a hypothesis is to be true before evidence is introduced; Y, the probability that an event/piece of evidence would occur if the hypothesis were true; and Z, the probability that that event/evidence would show itself if the hypothesis were false. Of course this is basic conditional probability that everyone remembers from school, but Silver turns it into an entire mode of thinking and applies it to terrorist attacks and Texas Hold ‘Em, showing the effectiveness of thinking about predictions in terms of probabilities (the weather forecast said there’s a 60% chance of rain tomorrow) rather than certainties (the weather forecast said that it will rain tomorrow).
One thing that should be noted is that The Signal and the Noise isn’t the most academic book out there, you can undoubtedly find other forecasting-related books ten times more dry and in-depth. If that’s what you read this book for, you may very well be disappointed. In terms of style, I’d say that it’s slightly more weighty than Freakonomics and definitely more so than Malcolm Gladwell. So if you’re like me and want something that balances the statistics with the quirky real-life examples, you’re more likely than not to enjoy The Signal and the Noise.