I thought the people who were pro-Trump were generally not people whose opinions I would weight as highly. And I think that’s lazy and possibly quite dangerous.

COWEN: If he chooses to run, does Michael Bloomberg have a chance?

SILVER: Give me a probability.

COWEN: If I go to the betting markets, this morning I think I saw 2.8 percent. Is that too high or too low, relative to —

SILVER: A 2.8 percent chance of becoming president?

COWEN: President.

SILVER: That’s probably about right. Obviously, in some ways, the climate could be as fertile as ever for some type of third candidate running, but Bloomberg, I don’t know. Number one, I’m not sure he differentiates all that well from Clinton, with whom he has a lot in common policy-wise, and Trump, with which he’s kind of the same character.

But the most basic problem is that in an election between Sanders and Trump or Clinton and Trump, everything is quite left of center. Trump, when he was thinking about running as an independent in 1999–2000, had an eccentric platform. It involved single-payer health care, a wealth tax. He was anti-immigration, even then, but pro-choice.

He said explicitly, “I’m not bound by any party, really. I’ll probably reconsider my stances if I become the Republican nominee.” To me, the more viable candidate in that case would be a Mitt Romney–Condi Rice ticket or something like that.

COWEN: Let’s move past the esoterica and give the people what they really want to hear. Let’s go back to 1968, in the World Series, the manager of the Detroit Tigers, Mayo Smith, he took Mickey Stanley, pulled him out of center field and put him in at shortstop so that Jim Northrup could play center and the recovering Al Kaline, who was the better hitter, future Hall of Famer, could play in right field.

No one had ever done this before. You’re advising at that time. How do you start thinking about that problem? You know what I’m talking about, right? You’re from Michigan, of course you do.

SILVER: I do know what you’re talking about. We know a lot more now about the value of defense than we did in the late ’60s or even than we did 10 years ago. If anything, defense turns out to be quite a bit more important than people would have thought. It was an ironic way when some of the conventional scout wisdom was confirmed, as data got more advanced and more sophisticated.

If you want to get really complicated, you say the Tigers had Denny McLain, Mickey Lolich. They had a strikeout-heavy pitching staff. Maybe worry about defense a little bit less. Tiger Stadium is a park conducive to low batting averages to begin with, a little high home run totals.

It’s not obvious to me that it was the best move, but it is interesting that, all of a sudden, baseball teams and football teams become, in general, more strategically correct when they have more on the line.

In the World Series, closer usage is a lot better, when you bring your best guy in in the eighth inning or the seventh inning. You see in the NFL teams will go for two more often in the playoffs, go for it on fourth down more often in the playoffs. Which is a hint that when the stakes are low, culture tends to prevail. When the stakes are high and the outcome of the game is all that matters, then things are different.

COWEN: Given your view on Mickey Stanley and the Detroit Tigers, who is the underrated candidate in the Republican race this year?

[laughter]

COWEN: Just to impose a kind of consistency on you.

[laughter]

SILVER: I don’t know.

COWEN: You’ve got to go long on someone. You have a hundred dollars to bet.

SILVER: I think the markets are fairly close to correct right now. But I’ve been a Rubio optimist for a while, on the theory that he is the only candidate who really has appeal to all the various sectors and constituencies within the GOP, which may be a fraying party, but still, he has the highest favorability ratings in the party.

He speaks the language of conservatives without being too extreme, but the big question in the election right now is, “Where is Trump’s ceiling?” If you start out at 25 percent, like he did in Iowa, that’s one thing.

Thirty-five percent is much closer to the point where he’d be hard to stop, but even now, you see in New Hampshire, even though he won with 35 percent of the vote, half of the Republicans there said they would not want him as their nominee, so the question is, “Can the non-Trump candidates organize themselves into one candidate?” And then does he stop at 35 percent, or 40, or 45, or 51? If he stops at 51, then it kind of doesn’t matter.

I suppose I think Rubio at — what is he at? Three to one?

COWEN: Something like that.

SILVER: I think he should be more at two to one or something, so not a dramatic mispricing.

COWEN: What do you think of the Ted Cruz theory that this election is not about swing voters, that you actually need a somewhat less compromising candidate to bring out the silent conservatives who maybe don’t vote, and that there’s a lot of them, and that Cruz is more electable than Rubio?

You hear this. There’s data on this, and what’s your opinion of that data?

SILVER: We talked about priors, or Occam’s razor. If you look at lots and lots of Senate races over time — and the reason why that’s relevant is because, number one, senators are easier to measure their ideology, because they legislate, and number two, we have a much larger sample size.

You can see that there’s a price for extremism. Not a price that can’t be overcome, if we go into a big recession or if Clinton or Bernie has huge problems, but Cruz would probably cost you three or four points relative to the median generic Republican.

COWEN: Last I saw, Bernie’s share was at something like 17 cents. At that price, do you go long or short?

SILVER: Probably short, but I think it’s also not dramatically mispriced. The thing people miss is that unlike on the GOP side where Trump’s at least passed the first test — he has people who are out there, willing to vote for him. There was some doubt about that, especially after Iowa, where he underperformed his polls.

Sanders, we haven’t really seen. Can he win states that are not very white and very liberal? Maybe he can. Nevada seems to be pretty close. I’m just saying, we haven’t really received that much information that would make you update your priors about Sanders all that much.

He also probably has to win by, with a little bit of room to spare. If it’s a tie, then Clinton will probably win on the basis of superdelegates. If she loses by a couple of points, but it’s close enough — so if you’re an underdog in a football game, and you lose unless you win by more than a field goal, it actually reduces your win probability quite a bit.

If you’re the favorite already, then maybe it wouldn’t, but that’s tricky. When underdogs win, they tend to win narrowly, and if Clinton wins some of the races she should have won or should have lost — because superdelegates turn a narrow Bernie win by a field goal into, “Oh, after further review, we’re going to have an overtime quarter. The superdelegates will weigh in instead,” then I don’t know. I think 10 or 15 percent, somewhere in that range is probably about right.

On sports stats — surprising and otherwise

COWEN: We may come back to politics, but let’s turn to a nobler endeavor, sports.

[laughter]

COWEN: You’re a fan of baseball, and I’d like to ask you, of all the different baseball records, which is the one that is most impressive to you, or the most a statistical aberration, and try to stay a bit modern. We both know in 1889, Hoss Radbourn won 59 games.

Start with Wilson’s — was it 36 triples in 1912? That, and up through the modern age. What’s the most statistically impressive baseball record, and why?

SILVER: I think the biggest outlier is the number of intentional walks that Barry Bonds drew. I forget what year it was, 2001, where he had like 161 intentional walks, and the next closest player is 50?

[laughter]

SILVER: There is just no other example I can think of in sports where the record holder has three times the sum total of the nearest highest player.

COWEN: What do you think of streaks? Do streaks impress you more or less than most people? DiMaggio’s hitting streak, consecutive games played streak, Cal Ripken. Johnny Vander Meer, two no-hitters in a row. When will that be done again?

SILVER: I’m sure you’ve read this is another area where the simple sabermetric answer might not have been totally correct, but there was a lot of talk for a long time about how the hot-hand theory was false, and how basically things are random to a first approximation.

Now there’s more evidence arguing against that, and in fact, it’s a classic mistake, but if you have a test that has low power, then you may mistake an ambiguous result for a negative result instead.

It appears now that there is some streakiness, as you would expect. You would expect that there is some variation in human behavior from day to day. It’s kind of amazing that being professional athletes, there’s less streakiness than you might think, but still — and now we’re getting, actually, data, too, that’s less noisy. We now get data, for example, for Major League hitters — how hard the ball comes off their bat.

We have some unpublished research that a colleague of mine is doing, but it looks like you can maybe predict batting average up or down, or on-base average 20 or 30 points from a baseline, which in baseball terms is pretty relevant.

If you have a guy hitting a leadoff spot because he’s a 0.370 OBP hitter, and he’s really a 0.340 based on his current condition, then he should maybe be demoted down to the eighth spot in the lineup instead. This is true of a lot of things where the first cut from data is overly simplified. You refine over time to something which is a little bit more nuanced.

COWEN: What do you think is the strongest piece of data-based evidence we have that sports analytics work? Let me give you an example.

As you know, the Houston Rockets are run by Daryl Morey, a numbers-intensive guy. He’s from MIT, seems to be super smart, and right now, the big debate in Houston is which of their two star players they should trade, or maybe both. They may not even make the playoffs, so how good is the best regression showing data analytics even work in sports?

SILVER: The Golden State Warriors might be one of the best examples, where —

COWEN: But, examples. Let’s say it increases your variance, so the good examples will look really good, but as a predictor, how hard should we be selling it? What’s the average impact, the marginal impact?

SILVER: You talked a little bit before about how hard it is to be marketed, so there’s a little bit of this, too, in sports. Actually, a colleague of mine, Ben Lindbergh, just wrote a book that’s not published yet, but that I was reading about. [The Only Rule Is It Has to Work is available in May. — Ed.] He and Sam Miller, another baseball stathead, were given, basically, ownership of a minor league team in Sonoma, California, for a year.

They kind of had carte blanche, but they encountered baseball culture in a very head-on way, and yeah, the team did pretty well. It was a very obscure minor league, but if the baseline is making half of your decisions right, and you make 55 percent of your decisions right, or 53 percent right, because you’re using analytics, that’s a pretty big gain at the margin.

Yet, in a sport as noisy as baseball, it’s going to take a lot of time to show up. Basketball is less noisy, I will grant you, but in general, I think the Spurs are fairly analytics friendly, and the Rockets and the Warriors. Basketball is probably the best example.

COWEN: Let me ask you about a sport which I find totally baffling, soccer.

[laughter]

COWEN: There’s not much of a natural time unit. That’s why it’s hard to squeeze in commercials, and not many points. There are assists, not many. They’re not always well defined.

Defense, my goodness, more confusing to this American than cricket, yet market salaries of soccer players are determined. There’s some papers on market salaries. The small amount of data we have seem to predict those salaries very well.

The fact that soccer behaves in normal ways, does this mean A, we can still get it all done with limited data, or does it mean B, having more data doesn’t really help us that much, and all of sports is a bit like soccer, and we’re ultimately just throwing up our hands and saying, “My goodness, it might as well be cricket”?

SILVER: I feel like I’m answering all your questions the same way, which is analysis is far from perfect, it’ll make lots of mistakes. At the same time, pretty good is hard to beat, sometimes. [laughs]

The heuristics that develop over time about how to value players at different positions in soccer — they kind of appropriately don’t value goalkeepers all that much, which the analytics seems to bear out, for example.

I do think, though, in soccer, that we’re at the very early stages, and partly there hasn’t really been very much data collected at all. It’s not like in the NBA, where you had blocks and steals, very crude defensive stats. Literally, and we built the system for ESPN a few years ago, where the only data that’s been kept in the long term in soccer is goals and bookings, red cards and yellow cards.

It’s not like we have assists, until recently. It’s not like we have tackles. You can maybe get time on the pitch if you parse play-by-play records. We don’t have crossing passes. I think there’s still a lot of room for upward improvement in soccer.

I do think, though, in soccer, that we’re at the very early stages, and partly there hasn’t really been very much data collected at all…[W]e built the system for ESPN a few years ago, where the only data that’s been kept in the long term in soccer is goals and bookings, red cards and yellow cards…I think there’s still a lot of room for upward improvement in soccer.

COWEN: We live in a global economy, with billions of laborers. Why don’t more of them learn the knuckleball? Wilbur Wood, Hoyt Wilhelm. They were not athletic. The pay’s pretty high. R. A. Dickey won the Cy Young award in 2012 with a knuckleball, which he taught himself.

People put labor into a lot of endeavors, but why so few knuckleballers? Why isn’t that a more regularized statistical process? Why so lumpy?

SILVER: I have two answers. One answer is that there are diminishing returns in the number of knuckleballers in the league, so when you have a second knuckleballer in the National League, when you already have R. A. Dickey, that already discernibly affects the success of both pitchers.

But I think there is a second thing, which is that sports tends to engender conformism. A lot of walks of life do, and that’s the whole tension, again, that comes up, is on the one hand, knowing that the market is usually pretty good, but on the other hand, that there are powerful biases to conform.

COWEN: Trump is like the knuckleballer of politics then?

SILVER: Yeah, that’s not a bad —

[laughter]

COWEN: He throws the knuckleball at Jeb Bush. Jeb is baffled. Maybe now he’s finally coming up with a response.

[laughter]

SILVER: The other kind of statistical way to think about it is that when you have something which is unusual, then there’s a bigger error bar around it, so you could say, “Well, I think Trump is, on average, going to get less of the vote than someone who’s much higher than him in the polls,” but he has a much longer tail on the other side, and so therefore that’s one reason to not be dismissive of him, at least in the early going, when everyone is kind of a long shot, at least.

On things under- and overrated

COWEN: In all of these interviews, in the middle segment, we do a little game. It’s called “Underrated versus Overrated.” I name a few things, and you tell me if you think they’re underrated or overrated, and you’re free to pass on any you don’t want to have an opinion on.

New York City, the Upper East Side. Overrated or underrated?

[laughter]

COWEN: Are they really that happy in Seinfeld, and how did they afford that apartment, anyway?

SILVER: I think a little overrated. But look, New York is actually extremely efficiently priced.

We did an analysis for New York Magazine a few years ago where we tried to say what’s the best neighborhood. The problem is that cost accounts for an R-squared of like 0.93 with our quality index or something. It’s really hard to improve your lot in New York, at least at the neighborhood level.

New York is actually extremely efficiently priced. We did an analysis for New York Magazine a few years ago where we tried to say what’s the best neighborhood. The problem is that cost accounts for an R-squared of like 0.93 with our quality index or something. It’s really hard to improve your lot in New York, at least at the neighborhood level.

But I don’t know, it’s hard to find good hole-in-the-wall places to eat in the — although there’s some ramen shops that are getting better. I, like, basically, judge everything by food.

COWEN: The shortest avenue in Manhattan, Fourth Avenue, it’s what, six blocks long.

SILVER: Yeah.

COWEN: Overrated or underrated?

SILVER: I think underrated. You probably saw my list a few weeks ago where, it’s short but it’s in a very dynamic section of town.

COWEN: Even with all the used bookstores closed down?

SILVER: Length isn’t everything.

COWEN: Length isn’t everything, OK.

The idea of legalizing drugs. Overrated or underrated?

SILVER: By this crowd, probably rated properly.

I mean, I don’t know. I’m enough of a lowercase L libertarian where I think that the government ought to have a stronger reason to intervene in choices that people are making instead of a lesser reason, necessarily.

To me, it clearly makes no sense to treat marijuana as being a more serious substance than alcohol, for example. I don’t think, in my heart of hearts, if I were running for office or in the Senate or something, that I would vote for a bill to legalize heroin or cocaine, but decriminalizing it, perhaps.

But I don’t know. I think the consequentialist case, for a long time, probably underrated and may have gone a little bit too far in the other direction. But again, I would say if it’s close, then you give people the choice.

COWEN: The musical group My Bloody Valentine, they put out an album in 2013 after almost a 20-year hiatus. Few people expected this album. It was called MBV. Overrated or underrated?

SILVER: The group or the album?

COWEN: The album. We know the group’s underrated, right?

SILVER: Yeah, the group’s one of my favorite bands.

COWEN: Sure, of course.

SILVER: I think the album was properly rated.

COWEN: Singapore. Overrated or underrated?

SILVER: Underrated except by you.

[laughter]

SILVER: But I saw exactly why you would like it. Right? It has great food, it’s like a little laboratory experiment.

It’s a fascinating — we were talking before about how Singapore is a city that, we hypothesized that if you have a few constraints that might seem slightly strange, then maybe having a few strange constraints is helpful.

When you talk about the strange — my sister lived in Germany for a while. She’s like, “Well, yeah, if you’re there in the shop and they’re going to close at four, it doesn’t matter if you have a huge line of groceries, the store will close down and you have to put your stuff back, and ‘Sorry, you can come back tomorrow,’” which kind of seems irrational.

But Germany has weird little quirks and constraints and yet seems to be doing, I don’t know, fairly well in certain ways, or Scandinavia or something.

If you give up a little bit of freedom to have more freedom, it’s like a Björk lyric, which is, “I thought I could organize freedom, how Scandinavian of me.” Singapore feels a little bit that way, too.

If you give up a little bit of freedom to have more freedom, it’s like a Björk lyric, which is, “I thought I could organize freedom, how Scandinavian of me.” Singapore feels a little bit that way, too.

COWEN: I have a big compound question. It’s about a few things. Feel free to touch on it what you want. But one of them is sports, one is fantasy sports, and one is gambling. They’re all interrelated.

What’s your take on — what do these actually do for us? How socially productive are they? You’re of a mixed mind on drug legalization. I could ask a comparable question about gambling, either legalization or liberalization. But what’s the net social externality on this mix of sports, fantasy sports, gambling?

What’s your view? I know it’s maybe fun for you.

SILVER: I’m biased, I make my living as a — you know.

One of the things about the regular fantasy football league that you’re in with your friends is that you get a lot out of it. You get to hang out with people you might not see very often, especially as you get older, into your 30s or 40s or whatnot. You get to watch a lot of games with more of a rooting interest.

The thing about daily fantasy sports is that a lot of that is really taken away. It’s very much a brute force approach to watching sports.

I did this for a few weeks and then got bored with it. But basically I had a program that would randomly generate high-scoring lineups. Then you scrape that data, and you load it up, 200 lineups at a time, and it kind of took all the joy out of it.

But that’s not quite what you’re asking, really. Right?

COWEN: Right. [laughter]

What if people just watched sports? Like, I watch sports. If it’s a good game, I enjoy it. I don’t feel I need to gamble on it. I don’t want rotisserie, I don’t want — I want to read analytics and I want to read you or your people at FiveThirtyEight on the game, which is great, and then watch the game and I’m done. If they’re good players, I’m happy.

What am I missing, if anything?

SILVER: For one thing, gambling and fantasy sports are a good way to teach people applied analytics. I’m not being jokey, like, I think this has probably a measurable benefit to society.

But look, it’s the case where, unlike drug legalization — where there are not a lot of countries where drugs apart from marijuana are even there fairly rarely — worldwide, people are much more relaxed about gambling, and it’s normalized.

You can go to the betting shop, any Ladbrokes anywhere in the United Kingdom and place a bet and it doesn’t seem to ruin society. Maybe you have in low-paying leagues or in tennis, the occasional betting scandal which is not great. But I think it’s a way for a substantial number of people to enjoy sports and develop critical thinking skills.

You can go to the betting shop, any Ladbrokes anywhere in the United Kingdom and place a bet and it doesn’t seem to ruin society. Maybe you have in low-paying leagues or in tennis, the occasional betting scandal which is not great. But I think it’s a way for a substantial number of people to enjoy sports and develop critical thinking skills. Again, I say if it’s close, let people do it, and I feel that way about gambling.

Again, I say if it’s close, let people do it, and I feel that way about gambling. But in that case, you do have examples of many, many Westernized countries where spending on sports is legal, and there seems not to be, at least, grave societal harm.

COWEN: You Run the website, FiveThirtyEight. It’s your vision, you founded it, you developed it. You took it to ESPN. Over those years, what would you say is the most important thing you’ve learned about managing?

SILVER: Basically there are three strategies, three fundamental strategies of management when you have a disagreement with something that your, one of your employees is doing.

One of which is you can give up. Right? You can say, “Well, I’m not going to pick this battle to fight, because there’s a consequence to lowering this person’s morale, or I’m tired, I have other issues.” So you can capitulate.

Number two, you can fiat. You can say, “Well, sorry, but I’m ultimately the one who signs your checks,” or my boss signs their checks, but, “This is the line of authority, and we are not going to publish that article. I’ll explain my mind later on.”

Number three is you can try and persuade instead. Which sounds perfect except persuasion is really, really time consuming.

Figuring out which ones of those three tactics to use and in what ratio is important. I actually found though, overall, that there’s like a little bit more value in micromanagement than I thought. Not about everything, but strategically saying, “I’m going to spend a lot of time going into detail on this one.” Or, I guess it’s just mentoring, I guess, is a way to put it.

COWEN: Which sports coach or manager are you most like? Vince Lombardi, Gregg Popovich? Who do you draw inspiration from? Do you think about it in these terms?

SILVER: I’m not arrogant enough to compare myself to Popovich. But I’m like, I’m laissez-faire, but when I weigh in on something, I’ll weigh in pretty directly. I think you do have to pick your battles a little bit. You have to hire really well.

But it’s a culture of creatives and a culture of journalists, and journalists are strange and wonderful people, and data journalists are still journalists too, but you have to kind of trust people to make their own decision.

A big thing, too, is kind of figuring out which one of my deputies, the other managers and editors on the staff, what’s my agreement ratio with them. It’s incredibly valuable to have someone who, without your intervention, agrees with you 80 percent of the time. Then the 20 percent of the time that they don’t agree with you, that they’re right as often as not.

If it goes to 95 percent, then they’re a sycophant, and it’s probably bad. If it goes to 60 percent, well, then, you might as well do the work yourself. Figure out the people who will listen to you, but also challenge you at the right times.

COWEN: You mentioned food before. Let’s take a data intensive approach to food. You’re trying to find a good place to eat. What is the underrated statistic about a restaurant that you will consult or advocate others consult in this endeavor?

SILVER: This is a fairly basic one. But I’d rather look, if you’re looking at Yelp or TripAdvisor, the number of reviews is a better signal than the average star rating. Especially the number of reviews relative to how long a place has been open.

We’ve done some work on this, too, where when you’re drawing from a more diverse segment of people — there’s something I want to vent about how, like, every book on Amazon, in the long run, gravitates toward having four stars. A lot of 9/11 conspiracy books are rated pretty well on Amazon, because only the conspiracists bother to read them.

Whereas, Othello or Macbeth or something, everyone reads, a lot of kids have to read it for homework when they don’t want to, necessarily, so they’ll leave a bad review there, potentially. But I think that problem is more acute than people might realize when it comes to restaurants, where a place is notorious for drawing people who might not like that cuisine as much.

People also, when I go — and I used to do more Yelping and stuff like that — if I go to a mom-and-pop place in a small town somewhere and it’s not very good, there’s almost no way that I’m going to leave a negative review for that place.

I don’t want to hurt anyone’s feelings, I don’t want to — there’s actually studies showing that Yelp reviews can, like, a one-star Yelp review can cost like thousands of dollars in business for a restaurant that has under 50 reviews or something like that.

COWEN: In New York City, is there better food on the avenues or the streets?

SILVER: I read you on this. I think the — but New York is weird, because there are really, there are kind of three New Yorks from a culinary perspective. Right? There’s rich Michelin-starred New York, there’s kind of hip Soho and Williamsburg New York, and there’s ethnic New York, for lack of a better term.

Making sure that you have a mental list of places from all three types of those. There’s some rules that work well in one of those lanes that don’t work well in the others, necessarily.

In the very high-end restaurants of New York, it’s like so competitive that I think your rule about, order the weirdest thing on the menu, I think there are parts of New York where that probably isn’t true, because it’s so hyper competitive that the menu couldn’t afford to lead people astray.

Sometimes the thing that the menu is very clearly pointing you toward in New York is the kind of thing that you would want to order instead. That might not be true if you go out to Queens or something like that, where, frankly, pound for pound, probably the food is better than Manhattan or Brooklyn.

But yeah, you could write a whole book and maybe I will, especially if we have Trump win the election or something, maybe I’ll write a whole book about heuristics for eating food in New York.

COWEN: I said before and I’ll tell the whole crowd, one of my dreams is that someday you write the quantitative history of New York City. This would be one of my favorite books.

Question about the weather reporting. There’s some evidence that there’s what is called wet bias, so storms are over-forecast. Why is that? Is this even true?

SILVER: It’s true the further downstream you go, so the local meteorologist here in Virginia or in Washington on TV, they want to get higher ratings.

COWEN: They’re trying to scare us.

SILVER: They’re trying to scare you, yeah.

COWEN: It’s like they want the Iraq War, so to speak, so that people turn on CNN.

SILVER: The irony though is the data the government produces is very well calibrated and doesn’t really have a wet bias. There are a few individual like models for winter weather that do. But I don’t know, it’s been kind of interesting, in my shoes, going from someone who was a total outsider, to someone who has more reputational risk.

To a first approximation, I think it might make someone a worse forecaster, potentially.

By the way, another thing about the Trump thing I’ve been thinking about is — so my early view, that Trump had a very low chance — not zero, but very low — of winning the nomination was not based on any formal model, per se. I wonder what if I had even like a fairly bad model instead?

The good thing about building a statistical model is that it commits you to rules, right? Instead of just kind of saying, “Well, early polls aren’t very predictive and your prior is it currently probably won’t win, therefore, probably not.”

It pins you down and says, “Well, OK, early polls aren’t predictive, but at what point do they become more predictive?” When Trump went from being at 25 percent in the polls to 35 percent after Paris and San Bernardino, how significant is that?

To have an answer that is set up by an algorithm you designed ahead of time is actually maybe more helpful than people would think.

The long way of saying this is that I’m not sure that I’m any better than the average pundit unless I have a model. The disciplining effect of a model, doing your thinking in advance, and setting up rules of evidence is probably quite important.

The long way of saying this is that I’m not sure that I’m any better than the average pundit unless I have a model. The disciplining effect of a model, doing your thinking in advance, and setting up rules of evidence is probably quite important.

On why so few professional athletes have come out as gay

COWEN: I have a question about the economics and sociology of sports. This has puzzled me for a while. You may have thought about this. But I’m struck by the relatively small number of professional athletes who have come out as being gay.

In Hollywood it’s a lot of people, even in Washington, which is a very conservative town, I wouldn’t say it’s a lot of people, but it happens in a quiet kind of way.

In sports, why is there so little? If we applied some kind of economic or statistical model, in which sports would you expect to see the new breakthroughs coming when they come?

SILVER: I’m sure there are a lot of athletes in the closet. I don’t assume that it’s four or five percent or whatever the population average is. I assume it’s a fair amount lower than that, but I don’t know, I think people forget about how much the economics change when you’re talking about people who are in the 0.001 percent of something.

Where the fact that, until fairly recently, until maybe a few years ago, and in many parts of the country, obviously, still now. Until fairly recently, growing up gay is something that was, if not traumatic, at least required a lot of bandwidth, it requires a lot of energy.

Because the fact that, for example, there’s data from Freakonomics about how hockey players who are born in January, just because they start a little bit earlier than their peer group, that’s a very powerful effect versus being born in November or December instead.

If something that minor can have that profound an effect, where I don’t know if it’s twice as many NHL players from January as December, then something as important to your identity as being gay in a society that until recently didn’t accept it, that’s a comparative disadvantage.

Maybe there are also correlations on what kinds of skills and traits people have, I don’t know, but we’ll see.

The prediction, if that theory is true, is that as it’s become more normalized, and now people who are growing up in middle school and high school where being gay is not as much of a disadvantage. Then you’d expect from that generation there to be substantially more gay athletes.

COWEN: In which sport will that happen first? What’s the implied prediction? We see a bit of it in women’s tennis, right?

SILVER: Women’s tennis.

COWEN: Individual sports, maybe, over team sports? Yes? No?

SILVER: Yeah, you would think that in tennis and golf you might see it first. The NBA, where talent is so manifest and one player can make so much difference. LeBron James could come out as gay tomorrow and I think it would not hurt his ability to get a max, max plus contract at all.

COWEN: But it could hurt endorsements.

SILVER: It could hurt endorsements. He is kind of a high default, but I don’t know. I think it’s no longer about kind of the marketing side of it so much as the fact that it just kind of — sports is still a very conformist culture. Some of the reason I might say the NBA is I think it’s a little bit more individualistic as a culture. Guys are free to express themselves more.

Listen to baseball players talk. They’re boring as hell. Right? Kevin Durant or something, these guys are smart and they’re interesting to listen to.

COWEN: Kareem Abdul-Jabbar, right?

SILVER: Kareem Abdul-Jabbar.

COWEN: Yeah.

SILVER: So I would think basketball might be a sport where you’d see it relatively soon.

On forecasting

COWEN: Let me ask you a general question about forecasting, and I worry about this in the context of finance. I see a lot of money managers, so there’s Ray Dalio at Bridgewater. He saw one basic point about real interest rates, made billions off of that over a great run. Now it’s not obvious he and his team knew any better than anyone else.

Peter Lynch, he had fantastic insights into consumer products. Use stuff, see how you like it, buy that stock. He believed that in an age when consumer product stocks were taking off.

Warren Buffett, a certain kind of value investing. Worked great for a while, no big success, a lot of big failures in recent times.

Is it possible the so-called true model is always shifting, and there’s a kind of selection bias where different forecasters are elevated and they have their run for three, five, however many years? Then the true model shifts and what they’re good at isn’t valued. We turn them over and replace them with other forecasters.

As, like, our best forecaster, do you worry about this?

SILVER: Sure. Even if you are skeptical about the efficiency of markets, if you have a great gig and you’re picking up hundred dollar bills off the ground, then boy if you can extend that by three or five years without adapting and evolving, that’s on the extreme high end I think. Three or five years is a very long and fortunate run.

That’s part of why even though now we’re very immersed in the election cycle, it’s part of why I wanted to make sure that FiveThirtyEight was not just an election site. We’re going to blow an election sooner or later. We might blow this one. To be doing a whole diverse array of things both intellectually and commercially is important.

The follow-up to that is, “Are there people who have the skills to find the next underweighted opportunity?” Maybe, that’s trickier. I think a lot of people have one or two really good insights, and if you’re very lucky that can take you a long way.

COWEN: Here’s a related worry. It’s clear in the data, stock market volatility is correlated with itself over time. If you have some volatile days, you’re likely to get more. That’s pretty clear. That’s another way to say those returns, for a while, are hard to forecast and stay hard.

This year politically, it’s already a big surprise to me, to a lot of people. Could it be the case we’re entering a new era where political volatility is higher and basically all forecasters will just do much worse than they have been doing?

SILVER: It’s possible. Again, I go back in saying what people take to be the equilibrium baseline condition may actually have been an outlier, instead. You have this relatively stable, long boom politics and economics from the ’50s to the ’90s or the early 2000s, thereabouts, and that could potentially reverse itself.

Again, looking at examples outside of the United States I think is instructive. Maybe I’m more of a believer in American exceptionalism than I thought. You see constituencies that are Trumpian in different parts of Europe and have been extant for a long time, so maybe America just got really lucky for 50 years.

Maybe I’m more of a believer in American exceptionalism than I thought. You see constituencies that are Trumpian in different parts of Europe and have been extant for a long time, so maybe America just got really lucky for 50 years.