Data Mining Book Review: Dance with Chance by Sandro Saitta.
From the post:
If you ever worked on time series prediction (forecasting), you should read Dance with Chance. It is written by a statistician, a psychologist and a decision scientist (Makriddakis, Hogarth and Gaba). As it is the case in The Numerati or Super Crunchers, authors explain complex notions to a non-expert audience. I find the book really interesting and provocative.
The main concept of Dance with Chance is the “illusion of control”. It is when you think you control a future event or situation, that is in fact mainly due to chance. This is the opposite of fatalism (when you think you have no control, although you have). The book teaches how to avoid being fooled by this illusion of control. This is a very interesting reading for any data miner, particularly involved with forecasting. The books contains dozens of examples of the limitation of forecasting techniques. For example, it explains the issues of forecasting the stock market and when predictions are due to chance. Authors use a brilliant mix of statistics and psychology to prove their point.
From the review this sounds like an interesting read.
Forecasting can be useful but being aware of its limitations is as well.