TL;DR: I think it's more valuable than ever to try to predict what the future might hold. This is my framework for thinking about the future. I am interested in different perspectives and your thoughts. Feel free to contact me: details are at the end of the article.
I'm preoccupied with predicting the future right now.
I may be allergic to emphatic, this-is-definitely-going-to-happen predictions, but let's face it. The big decisions we make in life are bets on what the future holds. The quality of our decisions are married to the quality of our predictions.
Predictions are especially important right now
With economies in induced comas, and the COVID-19 pandemic taking hold around the world, we're in a massive state of flux.
At this moment, the range of future possibilities is wider than it has ever been in my lifetime.
(More specifically, the range of possible scenarios is as wide as ever, but the probabilities have a lot more room for error. But you get the point.)
I think the consequences of making good or bad predictions are much higher than usual as well.
Some people are going to suffer (and already are). Some people are going to profit enormously. It's always the way when there is volatility, uncertainty, complexity, and ambiguity.
For many people, the consequences, good or bad, will come down to their pre-existing circumstances, which exacerbate whatever happens later. Luck (good or bad) almost always plays a part.
But consequences can also come down to your actions, and your actions are often based on your predictions about what the future holds.
Of course, it's a combination of these factors. But at the moment, only one of those is under our control.
If you want to move the needle in terms of your long-term consequences from this short-term shock, in order to reduce the likelihood of bad outcomes and increase the likelihood of good outcomes, it's valuable to try to predict the future.
I'm blowing off the dust from my article from September last year (which feels like decades ago) about How to predict the future, and re-writing it for this moment.
Spend your time and energy on predictions that matter
I think the consequences of making good or bad predictions are larger right now than they will probably be at any point in my lifetime.
As a result, I'm spending more time and energy on predictions now than normal. If there's a time to prognosticate about the challenges and opportunities ahead, it's now.
Ordinarily, I'm more interested in personal predictions.
At the moment, my focus is on higher-level predictions, which will probably start to get more specific as I develop confidence in certain trends or themes, and opportunities that present themselves.
Think in terms of possible futures, and degrees of certainty
Is the world ever going to be the same? I don't think it will.
To what extent will it change? How will it change? No one knows for sure. We need to accept that we are taking about possible futures, that might be more or less likely than others.
In other words: you need to update your predictions based on new information.
If you're not flip-flopping with some of your predictions, then you're predicting wrong.
I encourage you to take a Bayesian approach to making predictions and decision-making. Julia Galef explains well in this video:
Have priors, and make probabilistic predictions based on your priors. But be prepared to update these predictions as your priors change.
You don't have to be exactly right
I LOVE The Beatles. In eight short years (between 1963 and 1970), they released some of the most iconic, enduring music ever.
They wrote some gems: Yesterday, Let it Be, Here Comes the Sun, and many more. But maaaaaaaaan, they also wrote some terrible stuff.
It's okay that The Beatles wrote some clangers. Likewise, not all of your predictions have to be 100% accurate.
When Bill Gates was building Microsoft, he had a vision of the future: "A microcomputer on every desk and in every home running Microsoft software". As a prediction, was it technically correct? No. But it didn't stop him from building a fortune.
Near enough was good enough. Not all of The Beatles' songs were classics. And your predictions don't have to be perfect, either.
How can you shape the future?
Bill Gates' vision was both a prediction and a mantra. He didn't just predict the future: he helped to make it happen.
There's a saying that "a crisis is a terrible thing to waste". This is often said in the context of politics and public policy. I feel uneasy about this philosophy. But I'm also aware that while scrupulous people agonise over the morality of exploiting a crisis, unscrupulous people won't hesitate to take what they can. A crisis can open the Overton window for interested parties and policy entrepreneurs to push for changes that would ordinarily be inconceivable – good and bad.
This is at the policy level. But more broadly, the future is more malleable now than it probably will be for some time. If you want to make a dent in the universe, now is as good as a time as ever.
Break big predictions into small predictions
My focus at the moment is on big-picture predictions.
There's more room for error with big picture predictions. But from these big predictions, you can drill down into more specific predictions.
I'm not going to make any predictions about the hospitality industry or the market for new & used vehicles. I don't have domain expertise, a special interest, or any direct skin in those games.
At the moment my special interests include (but aren't limited to) how current events will impact:
- professional services industries;
- travel and transportation (locally and internationally);
- information technology (such as virtual reality and communication);
- social changes, including how people interact electronically, and the extent to which any changes will be enduring;
- entertainment;
- the appetite for large gatherings in the future;
- the relationship people have with work;
- the distribution of wealth, income, opportunity, and outcomes for certain groups of people, and how this will change;
- how risk is distributed during this shock and afterwards;
- philosophical views, especially as they relate to political ideology and policy views; and
- the medium- to long-term impact on education (both formal and continuing professional development).
As time goes on, I'm hoping to end up with some specific predictions. With any luck I'll find avenues that will be relevant to me, and my unique skills, knowledge, and interests – ie, opportunities that I can pursue.
I will also be thinking about the impact of these things, and how they might pose risks to me, my family, and the type of society I want to live in.
Take different perspectives
When making predictions, it's important to take different perspectives. In Superforecasting, Philip Tetlock and Dan Gardner use the metaphor of having a "dragonfly eye" – of synthesising many different views into a single image.
In this spirit, these are some of the questions you or I might ask ourselves:
- Is there something that is analogous to what you're trying to predict?
- Is this different to anything else? In what ways and to what degrees? Is it really that different?
- What's the most likely scenario?
- What's a best case scenario?
- What's a terrible scenario?
- If this happens, what else can or will happen?
- What is the counter-argument?
- What would a domain expert think? (And do you know, or can you reach out to someone who is a domain expert, or has more knowledge than you?)
- What would a [politician, lawyer, doctor, economist, journalist, [insert a relevant profession] etc] think?
- When I think of someone I know who might have a unique perspective, what are they likely to think? (It might be worth asking them!) (I've "collected" a bunch of friends, family members, and associates, who have unique perspectives/ways of thinking/backgrounds that can often shine a different light on an area. I often try to channel one or more of these people, or reach out to them and ask general or pointed questions.)
- What are the incentives? Are the incentives different over shorter or longer time frames?
- Are stakeholder incentives in conflict? What are their relative points of leverage?
- How would people in a vulnerable position react? How would someone who didn't have skin in the game respond?
- Are there any socially unacceptable perspectives? Are there any perspectives I'm uncomfortable entertaining?
- What would a sociopath think or do?
- Is there anything that you might be missing? (For example, hidden incentives?)
- Would could throw a massive spanner in the works?
- Can you think of any wild card scenarios?
- What would I have thought about this 10 years ago? How will I think about this in 20 years' time?
- What assumptions are you making?
An invitation
I'm kind of preoccupied with what the future holds at the moment.
If you want to bounce some ideas about what you think the future holds, please touch base! I'm keen to get as many different perspectives from outside of my own bubble as possible. Feel free to email me (sonnie@fairhavenwealth.co.nz), call (021 0269 2213), or schedule a time to chat below. Consider it a "curiosity conversation".