Following trends and making predictions is a risky endeavor. Sometimes when
you think you spot an important trend and make a prediction, the trend goes the other
way. Nate Silver in The Signal and the Noise explains why many predictions fail. One
reason is what he calls “self-canceling predictions.”

One good example of this is what happens when we use the GPS navigation
systems in many of our cards. He explains that there are two major north-to-south routes
through Manhattan: the West Side Highway (which borders the Hudson River) and the
FDR Drive (on the east side of Manhattan). Imagine that it doesn’t matter to you which
drive you take north. Since you don’t strongly prefer one or the other, you consult your
GPS to determine which drive has less traffic.

But think of what happens when lots of people begin to look at their GPS system.
The route with less traffic will be flooded with traffic. Soon the “faster” route actually
becomes the “slower” route. In case you are wondering, there is now empirical evidence
that this is becoming a problem in cities like New York, Boston, and London.

The opposite of this would be the self-fulfilling prediction. We can see this with
many polls during the election season. Nate Silver illustrates this with the 2012 Iowa
caucus race. A CNN poll released before the vote showed Rick Santorum surging to 16
percent of the vote when he had been at about 10 percent before. There is some evidence
that the poll was an outlier. Other surveys did not show him gaining ground.

Nevertheless, the poll provided Rick Santorum with lots of favorable media
coverage. Some voters switched to him from similar candidates like Michele Bachmann
and Rick Perry. Before long, the poll and the media coverage moved him up in the polls,
and he finished well ahead of Bachmann and Perry.

The lesson here is to be careful that your prediction doesn’t cancel itself out or
becoming self-fulfilling. His book is one more reminder that we need to have lots of
discernment.