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Predicting the weather is not like spotting a bank crisis

The holiday season requires a close eye on the weather. Modern people do this, not by looking at the sky, but by consulting a smartphone. Yahoo, the most popular weather app, tells you the probability of rain, hour by hour.

But you don’t want to know the probability that it will rain. It either will rain or it won’t and you want to know which of these outcomes will occur. And you can never know whether such a prediction was accurate. Both rain and no rain are consistent with the claim that the probability that it would rain was 10 per cent.

The British meteorological office gives some help in interpretation. It suggests that if the probability of rain was 10 per cent you might be willing to hang your sheets out to dry, but not a shirt needed for an important dinner. While this may be useful advice, however, it is not an explanation of the meaning of the statement that the probability of rain is 10 per cent.

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約翰•凱

約翰•凱(John Kay)從1995年開始爲英國《金融時報》撰寫經濟和商業的專欄。他曾經任教於倫敦商學院和牛津大學。目前他在倫敦經濟學院擔任訪問學者。他有著非常輝煌的從商經歷,曾經創辦和壯大了一家諮詢公司,然後將其轉售。約翰•凱著述甚豐,其中包括《企業成功的基礎》(Foundations of Corporate Success, 1993)、《市場的真相》(The Truth about Markets, 2003)和近期的《金融投資指南》(The Long and the Short of It: finance and investment for normally intelligent people who are not in the industry)。

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