The Signal And The Noise By Nate Silver

In his book, “The Signal and the Noise,” Nate Silver discusses many statistical and analytic techniques as they relate to everyday events and phenomenon. For instance Silver writes about topics such as baseball, weather predictions, climate change, the stock market and terrorism to name a few. In each chapter he addresses the issues at hand and describes how statistical analysis can be employed to make the topic easy to understand and often predict certain outcomes. The book is very enjoyable and easy to follow and understand. There is simple language used and mainly every individual will be able to relate to the material at hand. Although Silver mentions several analytic techniques that are quite pertinent, one of the most commonly mentioned …show more content…
In this chapter, Silver Sliver mentions that there are “systematic patterns” in the stock market. He also writes that these so called “patterns” are often widely exploited once they are recognized. He also mentions that in the past, investors held on to their stocks for several years and in modern times, the average time an investor holds onto a stock is less than half a year. I can believe that in modern times, investors do not hold on to their stocks for as long as they did in the past, just as Silver mentions because I have witnessed this firsthand with relatives who invest in the stock market over several years. I know I personally always hounded my relatives for holding on to one stock for too long while forging what I thought was a profitable sell (this is described by Silver as “shortsightedness”). Overall, this chapter is very informative and helpful in understanding the stock market and how it works for people who are new to the whole concept additionally we learn as with many investments, the stock market is also one in which there is a need to make accurate statistical predictions in order to maximize profits. As Silver also mentions in his book, there is a special relevance of risk and uncertainty to the design of business models. Before we discuss the two, it is important to note that they are not the same thing. “Uncertainty deals with possible outcomes that are unknown, risk is a certain type of uncertainty …show more content…
There is no way to be sure how the investment will turn out and there is always a risk of experiencing loss in profit and not achieving as much as expected. The good part of this risk is that it can be statistically predicated in many cases. For instance, businesses can calculate the risks that are involved and whether or not they will be able to absorb the negative effects if need be and can then make their decisions based on that prediction. However risks and uncertainty are always present for businesses and as a result management must be prepared for anything at anytime.
In order to effectively identify risks and uncertainty a business must first simply identify them and then assess whether the probability of these risks and uncertain circumstances is high or not likely. In simply identifying the possibly negative outcomes, the business is able to learn what the risks are and also what the chances of them occurring are and this is a giant help in accessing whether or not they really need to invest the resources and time in managing the