How Do Pundits Never Get It Wrong? Call a 40% Chance

Talking heads have learned that forecast covers all outcomes; ‘I just said it was a strong possibility.’

.. What are the chances that readers will make it to the end of this article? About 40%.

If you do make it, that prediction will look smart. If you don’t, well, we said the odds were against it.

Such is the nature of the 40% rule, a favorite forecasting tactic of Wall Street analysts and other prognosticators trying to make a bold call without being too bold.

.. Former British Prime Minister Tony Blair said last month there’s a 40% chance that Brexit will be reversed; Citigroup Inc. analyst Jim Suva wrote that there’s a 40% chance Apple Inc. buys Netflix Inc.; and Nomura Holdings Inc. economist Lewis Alexander said there’s a 40% chance Nafta gets ripped up.

The nice thing about 40% is that you never have to say you were wrong, says Peter Tchir, a market strategist at Academy Securities. Say you predict the Dow Jones Industrial Average has a 40% chance of hitting 30000 before year-end.

“Get it right and you can say ‘See, I was telling everyone it could happen,’ ” he says. “Get it wrong and you can weasel your way out: ‘I didn’t say it was likely, I just said it was a strong possibility.’ ”

What I Got Wrong About Donald Trump

If there was anything that should have signaled that “this time would be different” from the very start, it was 17: the number of Republican candidates who entered the race.

.. It created a huge collective action problem, in which none of the Republican candidates had a clear incentive to attack Mr. Trump — just their rivals for their niche of the Republican Party. The effect was to legitimize Mr. Trump as an ordinary candidate and to damage the others.

.. The race narrowed to three candidates only after two-thirds of all of the delegates to the Republican convention had been awarded. It became a one-on-one race only after Mr. Trump had effectively secured the nomination.

.. But what wasn’t really discussed was what ultimately happened with Mr. Kasich. He was strong enough to prevent Mr. Rubio from consolidating the center-right of the Republican Party, costing him states like Virginia on Super Tuesday. But he wasn’t strong enough to become a plausible contender in his own right, like Mr. McCain in 2008.

.. This could just be the result of a simple analytical error: conflating opposition to ideologically consistent conservatives with an affinity for establishment-backed candidates.

.. Either way, I thought the party’s establishment could count on these voters, and instead they were among Mr. Trump’s strongest backers in the end.

.. His limited resources were irrelevant — he had unlimited free media.

.. An even bigger surprise was the complete failure of Republican elites to firmly and consistently denounce Mr. Trump. It’s why I thought he was done after his comments dismissing John McCain’s status as a war hero; I thought a “chorus of Republican criticism of his most outrageous comments and the more liberal elements of his record” would follow, but it simply didn’t.

It never did.

..If the Republicans had delegate rules like those of the Democrats, Mr. Trump would not yet be the nominee. He would be counting on superdelegates.

..Two-thirds of all of the delegates were awarded in the 45 days after Iowa, making it important for the party to narrow the field quickly in a year when it was not positioned to do so.