Process

Any forecast consists of five steps. It sounds simple. In practice — it’s discipline. 1. Problem definition. Not “what to predict?”, but how it will be used. For prediction markets: which event, what horizon, what success criterion. 2. Information gathering. Two sources: data and context. Sometimes the data are scarce — then understanding the mechanism matters more. 3. Preliminary analysis. Plots, trends, jumps, seasonality, outliers. You need to see the structure before you build a model. ...

I’m starting to study forecasting to think more precisely. Most forecasts are confident words without probabilities. I care less about asserting and more about testing. Here I will log the learning process: how my estimates change, what turns out to be noise, and how the model is corrected. First steps are simple: observe, assign probabilities, remove unnecessary assumptions. The model will change — and that’s part of the process. This blog is not about being right. It’s about honesty under uncertainty. ...