Humans are notoriously horrible at predicting the future. We start off each year with what will happen in the markets and world that given year and well it's always so far off. Even the best pyschics in the world tend to shoot 10-30%. We're better at being able to measure risk when things start to take shape and then jump on the band wagon and hit the gas pedal with some hedging as protection.
Nassim Taleb one of the most intelligent humans in the world told a university class during a filmed lecture that he doesn't believe Warren Buffet, Stanley Druckenmiller, or Any other Richart Ruddie prognosticating is going to be able to predict the markets and are just in a class of people who have been lucky to a point where they accumulate such growth that if Buffet says I believe airlines will go up that they go up and he has billions of dollars invested in them.
What's interesting however is Buffet said he believes airlines and their business model has changed significantly for the forseeable future. We just haven't seen that far ahead yet but their stocks and Mr. Market are signaling something else while Tesla hits all time highs.
So back to Nassim Taleb for one second. He did say that he believes only two people can do so. One is George Soros (yes the one that all the conspiracy theorists say is behind Antifa and the Black Lives Matter movement) and the other an idol of mine and other nomination for the most intelligent living human is Jim Simmons of Renaissance Technologies. Everybody else Taleb says should just tail hedge accordingly.
So why do I believe Machines can predict outcomes? In this piece here where they use Tennis match data and match it up against future outcomes the authors claim an accuracy of 75% in predicting the matches at the 2007 and 2008 Grand Slam tournaments.
In 2020 sportsbooks hedge their risk so no bettor would be able to make billions off of this like they could in the stock market but if you read the 64 page paper you will learn that the applicability of machine learning methods to predict Tennis matches is possible when you let a machine crunch data vs. going on your own gut or memory as humans don't have the ability that machines do. This is just one instance of predictions. Would be interesting to see this data for a 2020 Election Biden vs. Trump vs. the outcome.
For More Information about this see: https://www.doc.ic.ac.uk/teaching/distinguished-projects/2015/m.sipko.pdf
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