Future Value

Today is election day and the political "experts" have made their predictions for the outcome. Which brings up the interesting dilemma of predicting the future -- in business and politics and sports people like to predict the future. The popularity of punditry is undeniable.

First, for today's election is pretty straightforward because of the science of polling. Predicting republicans will pick up seats in the U.S. Congress is simple because of the many polls taken over the last several months. Interestingly, however, when the polls show something that is unprecedented such as the what some say about the size of the possible changeover, then the pundits can create alternative interpretations as they try to fit the new facts to historical records.

Punditry and fascination for the future has few limits. Consider the Internet site intrade where you can bet on future events of all stripes. For example, do you know the odds that Sarah Palin will get the republican presidential nomination in 2012? Well at this moment those odds are nearly 17% according to those willing to bet their money via intrade. I am not sure, but I doubt Barack Obama was even rated for the nomination in 2006, two years before he got elected president (and those that took high odds on Hilary Clinton lost their bet). The future is fascinating, but impossible to predict.

Many tomorrow will get their predictions about this election mostly right (intrade has the probability of a republican takeover in the House at 96%, so don't be too impressed by anyone predicting such an outcome) but anyone who cared to predict this election 18 months ago or earlier . . . well they might as well go the racetrack (or predict who will win the world series in 2011) where educated guesses probably are going to still lose you money.