Wednesday, June 27, 2007

full disclosure

okay, that's enough of that.

the true artists of forecasting have always been thieves

there are those who produce forecasts uncritically. when asked why they forecast, they answer, "well, that's what we're paid to do here."

my suggestion: get another job.

this suggestion is not too demanding: unless you are a slave, i assume you have some amount of control over your job selection. otherwise this becomes a problem of ethics, and a grave one at that. people who are trapped in their jobs who forecast simply because "that's my job," knowing pretty well that their forecast is ineffectual, are not what i would call ethical. what they do is no different from repeating lies simply because "that's my job."

anyone who causes harm by forecasting should be treated as either a fool or a liar. some forecasters cause more damage to society than criminals. please, don't drive a schoolbus blindfolded.

nassim taleb reminded me again recently of something that i too rarely emphasize here -- that forecasting in a wild world is a practice fit only for the most broad-minded and suspicious, both on the giving and receiving ends.

i've been wrong on any number of things over the years here -- but it's going to be pretty hard for anyone to credibly say that i've said much that's completely thoughtless, and on the broad points of the cubs i've had the good fortune of being right a lot since ccd started this blog. that has, i'm sure, given some people the impression that i know what i'm talking about -- that i know what's going on.

ladies and gents, i wish that were true. a lot of what i do here in terms of analysis is really just a brain sharpener for more profitable work in the markets. i don't have any special insight on the cubs. i'm not "connected". i don't know anything you don't. and i'm not a fortune teller (or a thief, thank god).

what i've been is a confluence of fairly sensible and pretty damn lucky. allow me to illustrate.

jacque jones had a pretty decent year last year after i spent several hours excoriating jim hendry for signing him. i called it a "boondoggle" and his contract "untradeable". then he went and hit 27 home runs. what are you gonna do?

well, you're gonna sit on luck. and jacque has obliged by playing like the worst player in baseball this season, making me look like a visionary.

but was i? no. it didn't take a genius to see that jacque -- as a thirtysomething outfielder who can't hit lefties and was never that good to begin with -- was, if all went according to plan, going to struggle mightily at times. but therein lies the caveat -- "if all went according to plan". very often in life, of course, very little goes according to plan. jacque spent a few months in 2006 not going according to plan, and then (conveniently for me) did -- and then some, playing a lot worse in 2007 than i thought he could. and now he truly is untradeable -- as events last night showed, no team will take him without the cubs paying so much of his contract that the league won't accept the deal. or maybe it was sam zell? (either way, it's something the cubs once again lied about to make themselves look more competent and less desperate than they are). and there was no predicting any of that.

this sort of variance around reasoned but inherently limited analyses gets willfully ignored here a lot with the words "mean reversion". i pretend that the variance is mild -- which it often is, but not always -- and that means will always revert within the timeframe of a single season -- which they often do, but not always -- and then issue prediction after prediction based on that flawed logic. and as long as the variance stays mild and means revert, i get to be right a lot.

i'm not shy about telling you -- even that is a lot better than what you read almost anywhere else in cubbie-bloggie-fantasyland. even if you ignore the outright "cosmic" crackpots and take a blog like acb -- which is correctly considered to be one of the more forward-thinking in cubdom and one of the very few i bother to read at all -- it's often nearly impossible to find the capacity to get even that much right. otherwise intelligent folks have been over there banging on since april about how there's "no chance on this earth they (the brewers) win 75 games and it won’t surprise me if they win less than 70", how the cubs are going "make a run at 95 wins", expounding that the cubs are "going to win the division ... I have little doubt about that" -- and not out of an appreciation for wild randomness but because they broadly failed to get even the mild-variability analysis right. run differential was really positive early on, and so was taken uncritically and without a whit of thought as to its rather predictable variance and dependency on babip. when i brought it up to them -- repeatedly and bluntly, to be sure -- i was first dismissed with some empty narrative and then (to my bemused amazement) booted by the self-proclaimed champion of free speech blogs!

this was/is a particularly funny case of confirmation bias, and with it every sensible thing that these same smart folks said all through the offseason was forgotten. worse still, these mistakes still aren't being acknowledged -- they've instead been largely repressed and denied, and the whole affair has been reduced to seizing on the trivial as though it were relevant out of frustration. all this out of one of the better blogs, mind you. i can imagine what's going on at the lesser ones. or maybe i can't.

anyway, the point is that getting these mildly-variant cases right may be something i've done better than some (though there's always tomorrow, and i'm sure the kids at acb will let me hear all about it when it comes, as well as any of the several points i've been ridiculously wrong about in the past), but it is FAR from everything in prediction -- in fact, it's the least part.

i've been crowing around here for quite a while that the cubs are doing more or less what i said they would as a team, and doing it a little less than halfway through the year. that is inherently dangerous! and why? because i got the mild-variability analysis wrong maybe?

no -- because i've done nothing at all to account for the wild variability, and wild variability as often as not determines what happens to teams in the end.

take an example -- if a group of people had been handed a schedule and asked in september of 1970 how many games the marshall football team would win, you might have gotten answers in a range anywhere from zero to ten depending on how deluded the fans in your sample were. but if you had asked them how many games the team would play, you would have got a universal consensus of prediction -- ten.

but the actual answer turned out to be nine because of some wild randomness.

now this is the a gruesome case, but these sorts of events -- events which come from outside the "rational" model which are rare, significant and unpredictably, wildly (ie not mean-revertingly) random -- occur all the time in sport as well as life and dominate the outcome. ignoring that is a kind of dereliction to predictive duty, and yet nearly every forecaster on earth (including yours truly) ignores virtually all of the more creative and monumental possibilities entirely.

take the sale of the club. was there anyone on any blog who, just 18 months ago, thought the cubs would be signed, sealed and delivered from tribune? and that zambrano's contract talks would be scrapped (at least for now) as (perhaps) part of it? and that the cubs would go on an iou-binge as a last ditch effort to (perhaps) rectify their bad name? the first mention of it came completely out of the blue for most fans, and virtually all denied any possibility of it thereafter, and certainly had no inkling that plans for 2007 and after might radically change. yet here we are.

i think that the only one so far to have been actually accounted for in any meaningful (ie, forward-looking) way here is the potential of the carlos zambrano/pitcher abuse situation -- only because empirical data indicate that he is in fact at some elevated and more obvious risk of being shelved -- but such black-swan risks are literally everywhere, and any that come to pass can have an immense impact on the fate of the cubs. (and of course for making that first sensible caveat for a black swan, i've been persistently laughed out of the room -- them's the breaks, i guess.)

can four-fifths of the brewer rotation develop elbow problems this month? sure. can the cubs go on a 24-game winning streak? yep. could the squeaky/leaky dome up in milwaukee collapse and send the brewers to play all their home games in sox park? absolutely.

none of these events are particularly likely, of course -- which is why forecasters convince themselves that they needn't account for any of them. but the truth is that there are so many potential blessings/disasters which can fall from the sky that one or more of them is almost sure to happen. the bias of these events is at least theoretically neutral (though many experienced cub fans would disagree vehemently) -- which is another reason forecasters convince themselves that they needn't account for any of them. but in truth those that come are not likely to be evenly distributed in effect and will therefore heavily skew the results.

so what am i saying? that all analysis is worthless? that "rational hope" is a fraud? no -- empiricism is as valid as it ever was, and can teach plenty to a bunch of starry-eyed hairless apes if they've the mind for it. you can still use a combination of evidence and reason to improve your chances in a chaotic world where you don't control the outcomes.

what i AM saying is that there's plenty left to come which -- full disclosure -- i have absolutely no idea of and can have no idea of. and maybe that in and of itself is reason enough to keep watching a dimwitted ballclub like the cubs that "rationally" has precious little chance of doing anything worth watching.

also -- a housekeeping note, and what i meant by the first line -- enough with the florid language, hey? in spite of the occasional (and totally misguided) praise it sometimes gets, the lingo is entirely put upon -- if people who write or talk like i have generally here ever existed, the last of them died in the 19th century. it's been i think a brilliant little inside joke for a couple of seasons now -- with the endless third-person frame and the tiresome sixteen-letter words -- alternative fooling the gullible into presumptions of strange intelligence in the writer and aggravating the stupid who find that presumed strange intelligence threatening -- while entertaining the few (probably very few) who took it for the silly contrivance it was. and it's been a hilarious little way to keep by vocabulary deeper than it would be.

but when some (who apparently are among the many who don't get the joke and think i actually talk that way) are taking it seriously enough to honor it with a pretty passable satire, the whole thing has clearly jumped the shark and become as boring (if reflexively smile-inducing) as using "fuck" for schoolchild giggles.

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