Video: Daniel Kahneman, Always Trust Your Numbers. Never Trust Your Gut

In this video by thought leader Daniel Kahneman, author of the best seller Thinking, Fast and Slow, touches on a subject close to home for us. Daniel talks about overcoming the cognitive biases and errors that can affect decision-making, and explains why people always overestimate their ability to predict the future. He puts his faith instead in…algorithms.

It resonates strongly with the proprietary sports prediction model we’ve built at, that employs part of Daniels perspective of the use of algorithms to provide a statistically higher confidence on predicting future outcomes.

See our video on how Daniel’s perspective on the use of algorithms and experts is employed in our sports prediction model (betting system) – watch video.

While we employ both groups of experts (professional handicappers and sports analysts), and the cognitive power of collective intelligence from the public consensus into our sports betting system, we also take these two key inputs into our prediction model, and apply our own computer algorithms, giving the sports investor or bettor the best of both to enhance the accuracy of predicting the future outcomes in sports.

Daniel describes why both can have its flaws (the human element); and statistically speaking the public opinion in many cases has shown an advantage to bet against their opinion for key reasons. And he goes on to explain why we can attain a higher confidence in predicting future outcomes from the use of algorithms.

The sports investing or betting system at employs all three, and benchmarks the performance not only against one another, but also in some algorithms rather than pit each one against the other, use them together to test, lean and optimize the performance accuracy.

MIT predicting economics & sports prediction system

Collective Prediction – Combining human and machine intelligence in prediction economies

MIT predicting economics & sports prediction systemBuilt on the idea of collective intelligence and behavioural economics that sports investing prediction model was founded, we’ve re-posted  below a research study call that applies a similar approach of human and machine to enhance the prediction outcome of economies…we just applied it to sports.

And while the study below addresses the collective intelligence of human and machine, I’ll note we’ve set forth to induce a 3rd variable to the prediction model – the experts. We use a) industry expert handicappers with 20-30 years experience, b) global people consensus data, and c) computer technology that makes use of algorithms in multiple regression, machine learning, and data mining.

While the MIT study is vague on its variables of ‘human’ and the algorithms or machine learning conditions applied to forecasting economies, its similar in the sense of its approach and applying currency and points to the benchmark the performance of its approach to attempt to prove the model can enhance the forecast of future events.

Just like in sports picks and prediction models no handicapper or system can get 100% of the prediction correct; that’s the goal. Any sports investor understands the approach is similar to stock market investing; the goal is to win over time at lessor risk than convention investment opportunities.

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