- Paperback: 308 pages
- Publisher: Wiley (December 20, 1999)
- Language: English
- ISBN-10: 0471358444
- ISBN-13: 978-0471358442
- Product Dimensions: 5.6 x 0.9 x 8.7 inches
- Shipping Weight: 15.5 ounces (View shipping rates and policies)
- Average Customer Review: 20 customer reviews
- Amazon Best Sellers Rank: #993,621 in Books (See Top 100 in Books)
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The Fortune Sellers: The Big Business of Buying and Selling Predictions
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From Library Journal
Sherden, a business consultant, explores seven of the major fields involving prediction?meteorology, economics, investments, technology assessment, demography, futurology, and organizational planning. He describes each field, examines its track record, and concludes that none can make accurate forecasts. Meteorology at least, he says, has a sound scientific basis, though it may never be able to make accurate, long-term predictions because of the chaotic nature of weather. The author says the impediment for the other fields is that they must deal with complex systems involving too many variables to devise workable laws on which to base predictions. He writes in a very readable academic style and documents his sources, while providing numerous charts and examples. Highly recommended for all academic and public libraries as both an overview of the seven fields covered and a palliative to the many popular works that purport to be able to predict the future.?Lawrence Maxted, Gannon Univ., Erie, Pa.
Copyright 1998 Reed Business Information, Inc. --This text refers to the Hardcover edition.
From Kirkus Reviews
A series of acute essays on the strange pseudoscience of predicting the future. Sherden, himself a consultant to companies like AT&T, here exposes the art of prediction as a skill not far removed from the (usually) smaller knack of the lucky guess. His targets begin with the relatively straightforward (weather forecasting) and move on to the globally devious (economics). Where cloudy skies are concerned, as he reminds us, forecasters are rarely trustworthy; to announce that ``the weather tomorrow will be like the weather today'' is statistically more accurate than even Al Roker's most carefully considered opinion. With economic forecasting, prediction seems much less reliable. A 1985 study by the Economist reported that sanitation workers actually tied for first place with heads of multinational firms as diviners of England's economic growth. Where economic forecasters are concerned, though they generate about $100 billion a year in consulting fees, Sherden compares their techniques to those of an ancient tribe worshiping the bull and the deer. He asserts that the efficacy of the forecasters hasn't improved, though some of their technology has. (Kodak and IBM, he notes, have dissolved their in-house economics departments; Microsoft shuns economists altogether.) But Sherden saves his best salvos for trend-predicters like Faith Popcorn, who charges $20,000 for a year's subscription to her monthly newsletter. He analyzes her most famous prophecy, regarding yuppie ``cocooning,'' and concludes that it simply didn't happen: From 1989 to 1994, restaurants saw a 25 percent increase in revenues, movie ticket sales rose 20 percent, and vacationing increased by 21 percent, contradicting the notion that Americans stayed home. He finishes off with a strongly worded discussion of false prophecies--from Manifest Destiny to the Nazi myth of the Aryan master race--that have cost nations human lives. Valuable support for anyone who instinctively rejects Nostradamus. -- Copyright ©1997, Kirkus Associates, LP. All rights reserved. --This text refers to the Hardcover edition.
Top customer reviews
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The author examines about every major field where forecasting is used:
3. Stock market
4. Population sustainability
5. Scientific advances
7. Corporate predictions
Interestingly enough, the largest number of people in any of these 7 forecasting groups is the 200,000 people who do financial advising....involving trillions in assets. Weather forecasting only has about 6,000 people......but it is a $5B business.
The author contends the $200B spent every year on forecasting is wasted money.
The author submits evidence that financial newsletters are worthless with regards to predicting profitable investments in the future. He also correctly points out that active mutual fund managers can not beat the plain stock market indexes. He covers bubbles including MacKay's Madness of Crowds and the Tulip Bubble.
The author also contends that most superior innovations are made by combining different technologies. This reminds me of a Russian company I ran into around 1992. This Russian company said the Russian government did a study of all patents issued, and concluded all patents are a combination of about only 1200 basic ideas. Their business model was to include all 1200 basis ideas in software, and then problem solvers could let the software combine the 1200 ideas into an ideal solution. Unfortunately, the software I tried had too many bugs to get any practical use out of it.
Predicting the future can be hazardous to your health as well. In 1956, RCA predicted there would only be 200,000 computers world-wide by the year 2000.
In the 1970's, GE led the way in terms of utilizing corporate strategic planners.......with a staff of 193 planners. When the Japanese threatened to take over the business world in the 1980's, corporations abolished their strategic planning departments. Jack Welch of GE disbanded their corporate planning department.
The author suggests that companies should quit trying to plan for the future.......and instead empower their employees and train them to adapt to changing circumstances........analogous to the US military on D-Day. The Americans at the working level on the ground adapted and overcame obstacles. The Germans relied on a rigid central command structure with no empowerment of the troops at the scene of the action.
The author suggests 5 key questions you should ask whenever you are trying to assess the credibility of a forecast:
1. Is the forecast based upon hard science?
2. How sound are the methods used to make projections?
3. Does the forecaster have credible credentials?
4. Does the forecaster have a proven track record?
5. To what extent is my belief in a particular forecast influenced by my own personal beliefs and wishful thinking?
The author's 5th question reminds me of something I learned about consultants while in MBA School. If you are a consultant, your first job is to figure out who the decision maker is that pays your bill. Your second job is to figure out what answer the decision maker wants you to arrive at........then manipulate the data to arrive at the right answer!
All in all, an interesting and thought provoking read.
In this age of full disclosure, it can be noted that I am the author and publisher of the book INDEX MUTUAL FUNDS: HOW TO SIMPLIFY YOUR LIFE AND BEAT THE PROS. This book is an introduction to the concept of index funds is and is sold on Amazon. I am also a contributing author to the book THE BOGLEHEADS GUIDE TO RETIREMENT PLANNING available from Amazon with an estimated release date of October 2009. I have also written 21 short stories on investing which are also available on Amazon.
If you want practical ideas on long term passive investing, read some of the books below:
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing
Prediction business is much wider than what i expected before reading this. It covers weather forecast, economic forecast, technology forecast and business forecast. It also touches Chaos and complexity theory, which i think not so many people know how one is different to the other.
What i really think is the climax of the book is the chapter about business forecast. It s so densely packed with useful business thoughts and tips.
I expected more mysteries about predictions, but what i got is very much about psychology. Perhaps, that s what prediction is about, understanding psychology and knowing how to make people believe in what you have to say.
In his plain and easy to understand way, Sherden cracks many of our illusions - and, in his way, show how the fortune tellers are here much more for themselves than for us. Sherden certainly didn't make a lot of friends showing us that, but thr readers defnitly will enjoy it.
What Sherden doesn't do is tell us why people continue to believe predictions, and why billions of dollars continue to be spent based on predictions that aren't any better than throwing darts. But that's a good topic for another book.
This book is absolutely required reading for anyone who wonders whether stock analysts or economists really know what the future holds. The answer is simple: they don't.
Most recent customer reviews
The author demystifies predictions in various areas including economics and politics made by "luminaries"...Read more