During my air travels yesterday (again, I'm on "vacation" through Monday, so my posts are going to be infrequent), I read the popular Nate Silver book The Signal and the Noise (subtitle: "why so many predictions fail – but some don't"). It was a good read, but not nearly as engaging as I was hoping.
One section early in the book that I did find intriguing was the delineation between "foxes" and "hedgehogs". It's quickly evident that Silver has a preference for foxes, which are people that are adaptable, self-critical, tolerant of complexity, cautious, and empirical.
Hedgehogs, on the other hand, are described along these lines:
- May view the opinions of "outsiders" skeptically;
- Mistakes are blamed on bad luck or an idiosyncratic circumstance;
- Expect the world will be found to abide by relatively simple governing relationships once teh signal is identified through the noise (cough cough – 1 through 5, A, B, C – – cough cough);
- Rarely hedge their predictions and are reluctant to change them;
- Expect that solutions to many problems are manifestations of some grander theory or struggle
I definitely recognized some hedgehoginess on my part, and there's no doubt of some shining, glorious examples of hedgehogs in the world of financial punditry and analysis.
For 2013, I'd like to endeavor to be more of a fox and less of a hedgehog. The road before us isn't as easy to discern as we'd like to think, and while that complexity and unpredictability may be irksome, our being irked isn't going to make the road straighten itself up.
