How to predict the future

What would be your first thought if I told you that predicting the future is easy?

Absurd.

Crazy.

Naive.

Everyone would be rich and happy.

Unsubscribe.

A few of these thoughts crossed my mind when I read this.

Christopher Mims is a WSJ columnist who has written over 500 articles about technology for the past 10 years. Predicting the future of technology is part of his job.

So it was refreshing when he reported that many of his predictions were mistaken.

Mr Mims provided tips on predicting the future to which we refined and added.

The first rule in future prediction is to remember what has worked will mostly work.

This means that disruptions rarely happen.

Investors are prone to forget the first rule. That is why markets have bubbles. They form when investors are overly excited about a new revolutionary technology such as artificial intelligence.

Mr Mims wrote that our humanity is one reason underlying the first rule. Our tendency to be creatures of habit means that getting us to change our ways is a steep climb.

The rule does not imply that disruptions do not happen. They just happen too infrequently for sane bets.

The second rule is do not forget the first rule.

As much as we dislike change, we like visionary entrepreneurs who so clearly articulate their immaculate belief systems that we wonder how they became this smart (and how we became relatively unintelligent).

We like them more when they are endorsed by our experts, who are as susceptible to the same human faults as we are.

Knowing something is not the same as practicing it.

Because there are many distractions attempting to persuade otherwise.

After we believe something, we need practice in avoiding distractions so that we truly believe.

Another common distraction to the first rule is insufficient history. The shorter the history of something, the less likely it would continue in the future.

When WeWork was crowned the “fastest-growing lessee of new office space in New York City” by Forbes in 2014, it had only existed for 3 years.

We would be more excited for its prospects if it had existed for 30 years instead. Yet WeWork didn’t make it past its 13th birthday (it now has a second life after exiting bankruptcy earlier this year).

We end this article with yet another common distraction to avoid.

How should you think about the rules if your neighbor becomes rich by disobeying them?

We do not deny good luck (we welcome it!) but we urge any with similar thoughts to remember the unlucky majority who perish after failing to follow the rules.

Good luck and good skills produce similar outcomes. Even a broken clock is right twice a day.

But only good skills produce repeatable outcomes over time. That is how real riches are build.

We can’t help but challenge our readers to the following question:

How should you think about the rules if you can’t find anything with sufficient history for a sane bet?

Send us your answers [email protected].