In my opinion, the most compelling evidence that self-proclaimed psychics cannot predict the future is that none of them are billionaires. I know with absolute certainty that if my predictions about what would happen one hour in the future were just 5% more accurate than random chance, I would have been able to retire to my own private island years ago. Predicting the future in this manner in a casino can make someone rich. Predicting the future in this manner in the world’s capital markets, … well, that’s just in another league. Many people have claimed to have an edge in the casino of world finance, and most of those have wound up broke. In The Predictors, Thomas Bass chronicles the story of a group of scientists who use their expertise in the field of nonlinear dynamics (chaos theory) to try to beat the biggest casino of all.

 

In a previous book, the entertaining but unfortunately out-of-print Eudaemonic Pi, Bass chronicled the story of how a group of UC Santa Cruz students developed equipment, strategies, and procedures that allowed them to beat the game of roulette, at least when their equipment was working. In that book, Bass mentions, almost parenthetically, that members of this group were doing some research in the field of nonlinear dynamics, more commonly called chaos theory. What he didn’t tell the readers is that this group of researchers performed some truly groundbreaking work that helped lead to fundamental breakthroughs in how scientists understand the natural world. In The Predictors, Bass chronicles the story of two members of this original group, Doyne Farmer and Norman Packard, as they try to use what they learned about predicting the behavior of chaotic systems to predict the movement of the financial markets.

 

In this book, …