From Robert Whitcomb’s “Digital Diary,’’ in GoLocal24.com
“Past performance is not indicative of future results.’’
-- Mandatory warning in investment documents
About New Year’s predictions: Many of them are based on creatures called the “conventional wisdom’’ or “the general consensus’’. Most turn out to be wrong in varying degrees because there are so many variables in real life.
Although we have computers that process data at astonishing speeds, they obviously can’t fully account for the effects of people acting unpredictably and/or irrationally, which, in varying degrees, is how they often (usually?) act. And that there are more people than ever adds to the complexity. Then there’s that Nature does its thing without consulting us. What if Hurricane Dorian, which hit the Bahamas with winds up to 220 miles an hour, had moved only slightly west and hit South Florida head on? The, say, $200 billion or more in damage would have hammered the U.S. economy.
Some readers might remember the “black swans’’ made famous by Nassim Nicholas Taleb: He looked at how it’s impossible to get at the probability of some rare events that are beyond normal expectations in science, finance, technology and history
Mr. Taleb is an essayist, scholar, statistician, former options trader and risk analyst who has deeply studied randomness, probability and uncertainty. Read his 2007 book The Black Swan.
Consider the black swan called 9/11, which changed so much: It caused wars, reduced our civil liberties, made travel more difficult and encouraged already dubious U.S. fiscal and monetary policies that helped create the Crash of 2008 and the Great Recession, which helped set the table for Donald Trump.
And digitization continuously speeds up changes, which affects all of life. Back in the ‘60s, British Prime Minister Harold Wilson was quoted as saying “a week is a long time in politics.’’ Now you can say that a day is a long time in politics, in the economy and elsewhere.]
2020 will feature lots of dramatic headlines and near-hysterical “breaking news’’ on electronic media. Most of it will end up forgotten in days, except by a few people most directly affected, such as relatives of those killed in plane crashes. The vast majority of such headlined stories have no effect on the course of history. The article that may turn out to have the most long-term significance might be buried on the bottom of page 13 of a newspaper.
I always liked the crazy poet Ezra Pound’s remark that “literature is news that stays news.’’
