Category Archives: Resources

Geopolitics, Investing, and the Little Book of Psychic Cold Reading

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Milo’s latest advice for investors and business people trying to come to grips with geopolitics is now available on Forbes.com.  It’s called “Geopolitics, Investing and the Little Book of Psychic Cold Reading”.

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Drivers of Prediction Accuracy in World Politics…Keep digging, Tetlock!

downloadPhilip Tetlock and his team have just released an interesting article entitled “The Psychology  of Intelligence Analysis: Drivers of Prediction Accuracy in World Politics” in the Journal of Experimental Psychology: Applied (January 12, 2015).  Their article summarizes the findings of the Intelligence Advanced Research Projects Activity (IARPA) tournament that we drew our readers attention to in 2013.  If you’re interested in intelligence analysis, forecasting or geopolitics, the article is certainly worth your time.  Nevertheless, we have our differences with Messrs Tetlock et al.

Some of the article’s conclusions are part of the received wisdom of forecasting.  For example, they conclude, “We developed a profile of the best forecasters; they were better at inductive reasoning, pattern detection, cognitive flexibility, and open-mindedness. They had greater understanding of geopolitics, training in probabilistic reasoning, and opportunities to succeed in cognitively enriched team environments. Last but not least, they viewed forecasting as a skill that required deliberate practice, sustained effort, and constant monitoring of current affairs.”  (Hurrah, and here’s to Open Sources!  The important drivers of geopolitics are not remotely secret.)  While these conclusions might sound intuitive, it is useful to document that they stand up to sustained scrutiny in a controlled experiment.

Some of Tetlock and his teams’ other conclusions also jibe with our (more sociological) approach to understanding the challenges of forecasting. Among other things, they find that when it comes to anticipating major geopolitical events, teams outperform individuals, and laymen can be trained to be effective analysts using only open sources.

The publication of this article, however, is also an excellent occasion to remind people of the shortcomings of a psychological approach to understanding success and failure in intelligence and geopolitical analysis. As we explore in Constructing Cassandra, purely psychological approaches present intermediate-level theories: they do not necessarily conflict with – but also do not entirely transcend – competing approaches to the problem (such as those presented by studies of organizational behavior or discussions of the “politicization” of intelligence).

Moreover, while the new paper certainly analyses the role of collective dynamics of the processing of information (which is a huge step forward when compared to simple “psychological biases” work), without an underpinning in the sociology of knowledge, some key root questions about intelligence analysis are left addressed:  e.g. Exactly which questions are asked, by whom, in response to what, and why; as you seek to answer them, who gets ignored, when and why?  Which questions are simply rejected? How and why does that happen?

As Wohlstetter wrote in 1962, “The job of lifting signals out of a confusion of noise is an activity that is very much aided by hypotheses.”  As I discussed last May at the Spy Museum in Washington, that remains true in today’s “Big Data” environment, and Tetlock’s experiments are a worthy attempt to determine who individually and collectively most effectively does that “lifting”, or sorting, of signals from noise.

One more failure of imagination...

One more failure of imagination…

BUT, what the IARPA work and Tetlock’s experiments do not address is the root cause of surprise, which in our view is the “problem of the wrong puzzle” or in Intelligence, bad Tasking (AKA “failures of imagination,”, that phrase so beloved of the 9/11 Commission which is now often wheeled out as a deus ex machina after a surprise has occurred).

In contrast, we believe the question of Tasking is vital, and that the systematic and sustained study of “Cassandras” – those who give warning but are ignored – are interesting exactly because their imaginations don’t fail yet for reasons that extend well beyond the merely psychological, their warnings (which should result in Tasking or further analysis) are ignored.  In other words, given a particular set of questions, who answers them best is quite interesting. More interesting, however, is what questions are not being asked, and who’s excluded from the debate. These dilemmas Tetlock’s work does not directly address, but we think the answers lie in the realm of the culture and identity of the organization performing the analysis.

Until  the role that the culture and identity of analytic teams and intelligence agencies as a whole is systematically address, we will have more strategic surprises than necessary.  The beginnings of a cure for any problem is a sound diagnosis.  Our diagnosis is that the core challenges of intelligence analysis are socially constructed.  In short, our hats are off to Dr. Tetlock and his team, but they need to dig deeper!

Naturally, we would welcome your comments on the IARPA research or Constructing Cassandra, and if you enjoyed this blog post, why not subscribe?

Two Short but Excellent Books on Intelligence

In the midst of so many “breaking” geopolitical events, I wanted to take a moment to recommend two recently-published books on Intelligence.  Both are quick reads, and neither seems to be getting the sort of attention I think they deserve.

The first book deals with the recent past, and is called The Snowden Operation: Inside the West’s Greatest Intelligence Disaster.  The author is Edward Lucas, who as a senior editor at the Economist brings thirty years’ of experience in Russian and European affairs to bear on what Snowden did and how the Affair as a whole should be approached.  Just seventy-six pages long, it’s a “Kindle Short”, so it will set you back about one US dollar.  Stop talking about Snowden, the NSA, privacy, and civil liberties until you have read it.

Stop talking about Snowden until you read this

Stop talking about Snowden until you read this.

My other recommendation is only ninety-eight pages long, and deals with the relatively distant past.  It’s James Jesus Angleton:  Was He Right? , by the famous journalist and author Edward Jay Epstein.  Angleton, of course, was the now much-ridiculed head of CIA counterintelligence from 1954 until 1975.  To Angleton’s foes (and as portrayed in a much recent fiction), he was the CIA’s secret Captain Ahab, paralyzing the Agency in pursuit of his own Great White Whale, non-existent Soviet moles.  I recommend that you read Epstein’s little book and judge for yourself if that thought-cliché is fair, illuminating or useful.    You may find yourself wondering if you understand as much as you think you do about the Cold War.  That doubt, in turn, may make you view the present with different eyes.

Are you SURE?

Are you SURE you know what you know?

If you want to go deeper into the possibilities that Epstein raises, I recommend a book by the recently departed Tennet H. Bagley:   Spy Wars: Moles, Mysteries, and Deadly Games.

I would welcome your comments on any volume mentioned here (or anywhere else on this blog).

If you enjoyed this blog post, why not subscribe?

 

Three Alternatives to Strategic Popcorn

Summer has been over for a while, but I’m only now finding the time to do a post.  It’s going to be short – just an update to a couple of my previous posts on reading for strategists (like Geopolitics and Investing and How to Think Like an Intelligence Analyst).

Red, White, Red, White, Red:  Five Forces!

White & Red – Five Forces!

The not-so-subtle idea underpinning those posts is that much of what is called business or investment strategy “literature” is intellectual popcorn:  fun to eat, temporarily satisfying, but with no long-term nutritional value.  Eat only popcorn, and you’ll starve to death.  (Here I could criticize business schools for serving mostly intellectual junk food to  their students, but that’s what happens when you let kids create the menu!)

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Constructing Cassandra Now Available

Our new book on strategic surprise, Constructing Cassandra:  Reframing Intelligence Failure at the CIA, 1947-2001, is now available for pre-order worldwide.

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Interested readers in North America can read reviews and order it via  Amazon.com or Barnes&Nobel;  in the UK you can use Amazon.co.uk; in the rest of the EU, you may wish to use Amazon.fr or Amazon.de; and in Asia you may wish to use  Amazon.jp.

If you do order it thank you.  Naturally, if you have any questions about the book, please ask us.

Personal Genetic Testing Companies – an Update

Last week, I again attended VALUEx.   If you’re a Value Investor, this is no more interesting use of your time – it is an extraordinary gathering of intelligent, talented and fun people.

Like me, many people at VALUEx avoid investing in technology firms.  On the other hand, many participants know that it’s important to follow the evolution of what I call the “3 GRAIN” technologies (3D printing, Genetics, Robotics, Artificial Intelligence, Information Technology, and Nanotechnology).  Each of the 3 GRAIN general purpose technologies will have an increasing impact on the creation of value in the years ahead.   Moreover, how they will combine to produce social changes is something that Philippe and I think about a lot.
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