Prediction

Yogi Berra is supposed to have said, "It's hard to make predictions, especially about the future." Wikipedia says Niels Bohr said something similar, I don't know about that. But go read the article on prediction and the stuff earlier in my blog.

Telling the future is one meaning of prediction. What we mean by it is, one can predict to the extent to which knowing one thing helps us know another thing. That is, knowing a person's age helps us predict his wealth, since age and wealth move together.

Automobile ownership helps us predict social attitudes of the owners. That is a person who drives a Toyota Prius has different attitudes than a person who drives a Jaguar.

In starting or running our businesses we want to develop indicators that predict other data. That is, the number of customers who buy our product in one period of time is a good predictor of profit, given that expenses don't go up or down radically. Or the market share of competitors in a niche predicts the likelihood that we will be success entering that niche.

Entrepreneurship is the life's blood of all my professional activities. It makes them go. And go read my mystery for free at wwww.kearneymusicschoolmurders.blogspot.com or buy it from Amazon.com more cheaply than you can print it out.

Prediction Games

From Wikipedia, the free, on-line encyclopedia: "A prediction game is a game which allow users to guess at the outcome of future events. Prediction games are generally operated online and are free for users to play. Points are awarded to players who most accurately predict the outcome of an event, and those points are converted into cash prizes."

You may have noticed that various news organizations started prediction games about who would be the vice presidential candidates. I never heard how they came out which probably means they weren't very accurate. A number of entities have used them successfully, particularly if those in the game are (1) independent, (2) diverse, and (3) and knowledgeable of the topic of the game. See Cass R. Sunstein, Infotopia; How Many Minds Produce Knowledge (New York: Oxford Unviersity Press, 2006). He reviews a number of prediction games on pp. 4-6.

If you're interested in prediction games, also called prediction markets, read the wikipedia entry and the Sustein book. I'm interested in what you think, so post a comment.

Entrepreneurship informs everything I do. For entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for entrepreneurial writing to www.kearneymusicschoolmurders.blogspot.com

Prediction

Most people think prediction as "a statement or claim that a particular event will occur in the future in more certain terms than a forecast." (See Wikipedia) This is true as far as it goes. However in statistics, prediction refers to the extent wo which, if you know A, you can, within a stated margin of error, correctly guess B. If you can do that, A is said to be an excellent predictor of B. For example, in many studies, age has been shown to be an excellent predictor of wealth. The Wikipedia article has a fuller discussion of prediction as guessing the future, but this is one of those articles I'm going to edit.

Prediction is big for entrepreneurs. They must act to effect the future. Yet what will that future bring. They must also understand their business. They must identify indicators that predict robust, positive cash flow.

If this or anything else grabbed you, post a comment.

All my professional activities are entrepreneurial. For real estate 2.0 go to www.yourstopforrealestate.com/blog; and for writing go to www.kearneymusicschoolmurders.blogspot.com.