Mundy: The search for an investment 'superforecaster'

The New Year started, as always, with a flurry of forecasts for the next 12 months. But with equity markets having one of their worst starts, a number of commentators have not had to wait as long as usual for some of their forecasts to look a touch optimistic.

When forecasting, a top-quality crystal ball is always in demand, but history informs us it is rarely available. In fact, academic Philip Tetlock demonstrated some years ago that the term 'expert political judgement' was an oxymoron. However, Tetlock was not content with his original conclusion that the average 'expert' was roughly as accurate as a dart-throwing chimpanzee. Instead, he was fascinated whether within the group of experts there was a sub-group consistently better than a chimpanzee and, if so, how these experts differed from the majority in their thought processes. Tet...