Forecasting 2003Is there any skill to forecasting?By Tangotiger
The forecast today is partly sunny, with a chance of showers. Tomorrow will be partly cloudy, with a chance of rainbow. AOL will go up, with a chance to go down.
There's a large group of people who don't have much, if any, use for forecasting systems (baseball, stocks, weather or otherwise). After all, these forecasting systems are based on probabilities and not certainties, so what good are they? These people reason that they could look at the back of a baseball card, look at his age, and make a decent forecast for his upcoming performance.
There's another large group of people who create forecasting systems, because they reason that there are many intricate details that need to be analyzed so that they can reduce the error range in their probability distributions and create useful and accurate forecasts.
Put up or shut up
Every year, the Wall Street Journal polls the major brokerage houses for their "top 10" picks of the year. They compare the annual performance of those picks against the S&P 500 index (i.e., mom & pop investor). About two years ago, I came across their list over a five-year period. Lehman and Smith Barney were the only ones to beat mom & pop. The other 9 brokerages trailed the index.
Throughout the year, we will be comparing the expectation of the systematic forecasters, the back-of-the-card forecasters, and the baseline forecast.
Four systematic forecasters have been kind enough to agree to supply me with the projected OPS or ERA of a selected group of players: Mitchel Lichtman, Ron Shandler, Nate Silver, and Tom Tippett. STATS did not return my request, so I will have to get them with a little more effort.
The baseline forecast is very simple: take a player's last 3 years OPS or ERA. If he was born 1973 or earlier, worsen his OPS by 5% or his ERA by 10%. If he was born 1976 or later, improve his OPS by 5% or his ERA by 10%. The 1974-75 players will keep their 2000-2002 averages.
The back-of-the-card forecasters are the Primer readers. Step right up, and apply whatever process you want. It would help if you do not use the projections of our forecasters.
The selected players
The 32 players were selected as follows:
Essentially, this is a list of players that should be hard to forecast, because their 2000-2002 performance has been very inconsistent. I introduced the Colorado condition, as well as the playing time condition, because even the back-of-the-card forecasters would agree that some systematic process to handle those players would be required.
In the coming weeks, Dan Werr, Chris Dial, and I will present some commentary on each of the 32 players. Some time in March, you will get the chance to fill in your ballot, with your forecasts. In the meantime, here are the 32 players that you can take a look at, and watch out for.
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