This podcast episode explores the inherent difficulties in making accurate predictions, particularly in economics and finance. Morgan Housel uses historical examples, including the failure to predict World War II and the limitations of using past data to forecast future events (like the Nile's high water mark or the Fukushima disaster). He highlights the psychological biases that influence predictions, such as the need for a prediction to be true impacting credibility and the sunk cost fallacy affecting the updating of forecasts. The podcast concludes by emphasizing that the correct lesson from surprises is that the world is inherently surprising, impacting both professional and personal forecasting.
