This makes perfect sense to me. But it shouldn't be 50%, it should be "regression to the mean" where the mean is a "naive" forecast based on history, the economy, demographics, etc, etc, etc.

Silver is making a prediction based on the best model that he has.

It isn't quite arbitrage, but if you did binary option pricing then you could indeed fairly safely make money off of Silver by taking known events that you know swing polls, like conventions, and betting on the likely pricing changes.

That said, the data set that Silver is developing using his model is going to be one of the key inputs into a more sophisticated pricing model. And how to factor in those other external factors is going to require a lot of calibration between Silver's predictions and a known database of such external factors. Which means that Silver's approach is the right starting place to get there, no matter how much Taleb might wish it otherwise.

Huh, yeah, that sounds very plausible.

A forecast that really did try to be an option pricing model like that would be interesting to see. It would have the advantage over a “now cast” that you could actually run the numbers and see how accurate it is. Whereas nobody can ever know what would actually happen if there were an election now rather than a year from now.

> A forecast that really did try to be an option pricing model like that would be interesting to see.

Silver’s election forecast models are exactly that. The nowcast expressly is not, but it's also not the headline model.

> It would have the advantage over a “now cast” that you could actually run the numbers and see how accurate it is.

That's true, and not just in theory: Silver has recently run the numbers for all of 538s forecasts (together and separated by sports vs. elections) and they are relatively accurate but not perfect; the supporting data is available for download, too.

https://projects.fivethirtyeight.com/checking-our-work/

Aha, thanks for clarifying that. I actually read that article, but the earlier comment got me confused over whether it was merely validating the final forecasts, or all forecasts over time.

Makes sense that it was written as an explicit rebuttal to Taleb -- but without mentioning him directly. :)

I don't think your assessment of 538's models is correct. They used to have something called the "nowcast" which is what your referring to, but they got rid of that.

As was mentioned elsewhere in this thread (and I am aware of from reading 538) during the campaign, Silver updates separately both a probability based on the scenario of "if the election were held tomorrow" and the best prediction of the election on its actual date.

In the 2016 election season, Silver used three models, two forecast models predicting what the election would do (a “polls-only” and a “polls-plus” model incorporating non-poll data), and the “nowcast” of what would happen if the election were held at the moment of the analysis. The polls-only forecast was (at least at the end of the cycle) the headline result.

You basically have it right.

But it's not a misunderstanding. Taleb understands Silver's approach, but thinks it's BS, entertainment not forecasting.

He's right, but I don't know why he cares. The problem isn't that Silver doesn't know math, it's that his goal is to entertain, not predict.

Taleb calling someone else an entertainer is a bit rich, sort of like a clown telling someone to have dignity. I have no opinion on Silver whatsoever, but Taleb is a bloviating ass who has gone from popular milquetoast observations, to climbing fully up his own backpassage. That this all began with the likes of Dinesh D’Souza doesn’t help.

I realize that Black Swan is popular here, but it was horrendous. A single essential premise which, instead of support, rested for chapter after chapter on assertions. That’s not evidence, it wasn’t an argument, it was the sound of someone having one good idea and then realizing they lacked the capacity to support it.

Quantifying the current voter sentiment makes you a entertainer? If anyone should be accused of "entertainment", I'd imagine it's the guy known for writing mass-market books.

Calling a statistician and entertainer is a rude insult, similar to calling a cable news channel an entertainment channel.

> You basically have it right.

GP doesn't even have Silver’s model right (he describes the “nowcast”, which was never the headline forecast model), so if he is right that that is what Taleb is referring to, that would be a pretty damning indictment of Taleb’s critique.