Alternatively, a specific stock could work, possibly over a longer time-frame, and I think it would be easier to have an interesting discussion (if that is one of the goals) about it. Someone who doesn’t follow the market extremely closely probably won’t have anything to say about why they think the market has a certain probability of going up/down next Tuesday, but people should generally be able to form a coherent (even if not particularly accurate) impression of a major company’s prospects from general knowledge.
In order to avoid mind-killing, it would be best to avoid AAPL or any company in a politically charged sector (energy, banking, defense, healthcare), but that leaves plenty of room. I would be most inclined to go with GOOG, because everyone is very familiar their products.
Asserting p(GOOG goes up over the next year) > 0.9 doesn’t seem that absurd to me. Asserting p(GOOG goes up tomorrow) > 0.9 does seem a bit absurd to me.
I’m not sure whether one is ACTUALLY more absurd than the other, but it intuitive FEELS to me that an economist OUGHT to be able to make long-term predictions about major, stable stocks with 90%+ confidence.
Even if this intuition is wrong (and I’d love to hear if it is!), I think many people will share this intuitive reaction. The goal is after all to select an example which is both factually correct AND intuitively appealing to people. So, an unintuitive but true statement would lack that “gut reaction” value.
Alternatively, a specific stock could work, possibly over a longer time-frame, and I think it would be easier to have an interesting discussion (if that is one of the goals) about it. Someone who doesn’t follow the market extremely closely probably won’t have anything to say about why they think the market has a certain probability of going up/down next Tuesday, but people should generally be able to form a coherent (even if not particularly accurate) impression of a major company’s prospects from general knowledge.
In order to avoid mind-killing, it would be best to avoid AAPL or any company in a politically charged sector (energy, banking, defense, healthcare), but that leaves plenty of room. I would be most inclined to go with GOOG, because everyone is very familiar their products.
Asserting p(GOOG goes up over the next year) > 0.9 doesn’t seem that absurd to me. Asserting p(GOOG goes up tomorrow) > 0.9 does seem a bit absurd to me.
I’m not sure whether one is ACTUALLY more absurd than the other, but it intuitive FEELS to me that an economist OUGHT to be able to make long-term predictions about major, stable stocks with 90%+ confidence.
Even if this intuition is wrong (and I’d love to hear if it is!), I think many people will share this intuitive reaction. The goal is after all to select an example which is both factually correct AND intuitively appealing to people. So, an unintuitive but true statement would lack that “gut reaction” value.