[A-List] Peak oil angst hits the NYT

["Sabri Oncu" <soncu@xxxxxxxxxxx>]

craig duncan:

> Without "expectations" (probabilistic perceptions) about the 
> future, how can you avoid simply acting from a short-term 
> perspective? 

Of course, you cannot. 

But my point is not that we should forget our expectations at all. Whether
we like it or not, we all have expectations about the future. Moreover, some
of us are "better" informed about the past and present than the rest so
those of us with "better" information of the past and present have "better"
expectations of the future than the rest, whatever "better" means.

Also, you should keep in mind that, from a mathematical point of view, the
"expectation" is just a "point forecast", meaning, it is just a point in a
set consisting of infinitely many points, and as such, its probability of
occurring is zero. 

This is why none of the expectations of any of us will get realized in the
future, although it is possible that one of them may as a matter of luck.
But this is no different than winning a lottery among millions of ticket
buyers.

What we need to think about is the DISTRIBUTION of possibilities, not just
the EXPECTATION associated with that distribution. It is clear to me that
what Henry suggests is one possibility. It is also clear to me that what
Tony suggests is another possibility. But these are two possibilities among
many and, as expectations, they are subjective for reasons I tried to
explain before. Long term perspective requires a good understanding/forecast
of the DISTRIBUTION of possibilities, not just its a few properties, called
the MOMENTS, such as the EXPECTATION, VARIANCE, SKEWNESS and the like. 

We need to focus on all of the MOMENTS, which is same as focusing on the
DISTRIBUTION.

Best,

Sabri