My favorite non-technical read of this year is likely Nate Silver’s book, “The Signal and the Noise“. As someone who spends the majority of the day grappling with the challenges outlined in this book, I can say Nate’s prognosis is thoughtful and spot-on.

Though this book is written for laymen, the diverse application of forecasting (baseball, politics, markets, weather, earthquakes, medical diagnosis, sports gambling, global warming, etc.) creates an engaging read. At its core, you find an objective skepticism towards modeling echoed in Emanuel Derman‘s intelligent “Models.Behaving.Badly.“.

The private* sector of modern societies is under constant pressure to forecast and optimize. This century will see a significant increase in the models embedded into all fabrics of our daily life (whether we know it or not). This trend should be embraced, but it is critical that the modelers and end-users (which is why I recommend this book) understand where limitations may exist.

* I hesitate to include the public sector here, which notoriously does not optimize (or if they do, they are embarrassingly inept at doing so). Understandably so, as they have no competition (see cash flows pertaining to the USPS, Amtrak, and MTA to list a few straightforward services provided by the government – it gets even more appalling if you focus on complex services).