From Craig et al., Can History teach us? A retrospective examination of long-term energy forecasts for the United States. Annu. Rev. Energy and Environment 27, 83(2002)

Stewart Brand sent in a piece by the Klimazweibel blog covered by Seekerblog.  It shows where the actual US energy consumption came in by 02000 vs the predictions from 01975.  It is interesting to see that we came in well below the lowest (read: most optimistic) prediction.  While the US still uses an amount of energy that would be unsustainable if adopted worldwide, it does look like all those energy efficiency programs that we started back in the seventies had a real impact…

Warren Buffett and (l to r) Protégé Partners' Scott Bessent, Jeffrey Tarrant, and Ted Seides.

The second year’s results on Buffett’s Million Dollar Long Bet are in.  Article from Fortune Magazine below:

By Carol J. Loomis, senior editor-at-large. April 27, 2010: 9:34 AM ET

(Fortune) — Unaudited results are in for the second year of “Buffett’s Big Bet” — Warren Buffett’s 2008 wager against Protégé Partners that a low-fee index fund will outperform certain funds of hedge funds — and the famous investor has gained some ground on his challenger. In the 2009 segment of the 10-year bet, an S&P 500 index fund — that’s Buffett’s pick — outdid the average performance of the five funds of funds that New York-based money management firm Protégé backs, 26.2% to 15.9%.

But Buffett’s spurt was not enough to undo the lead that Protégé’s funds had racked up in the turbulent year of 2008. True, the standings for the two years combined show both contenders having lost money. But Protégé’s picks are down 11.8%, less than the S & P’s minus 20.2%.

Both sides are measured net of all fees, costs, and expenses. By the terms of the bet, Protégé has never publicly disclosed the names of the five funds it picked. One of them is assumed to be the fund of funds that Protégé itself runs.

Buffett does know the names of the five funds and has seen their audited results for 2008. He will not see 2009 audited results for the funds until later this year.

The two sides, however, agreed last fall that “approximate” results for the previous year would be announced each spring, in time to be discussed by Buffett at the Berkshire Hathaway (BRKA, Fortune 500) annual meeting, which is to take place in Omaha this week, on Saturday, May 1st.

The precise index fund “bought” by Buffett is Vanguard’s S&P 500 Admiral fund
In a sense, the horses in this race have so far run true to form. In an up period for the market, which 2009 obviously was, the general market often beats hedge funds.

But in a bad year, and 2008 certainly fits that description, the short selling that many hedge funds engage in and their freedom to roam beyond stocks allows them to cut their losses and whip the S&P. In 2008, S&P’s Admiral shares were down a devastating 37.02%, The Protégé funds managed to fall by “only” 23.9%.

The money involved in this bet is $1 million — sort of. That qualification is necessary because of a present-value factor. Each side originally put up $320,000 as its wager. The total funds of about $640,000 were next used to buy a zero-coupon bond that will have appreciated to a value of $1 million at the end of 2017, when the bet concludes.

That prize will then go to the winner’s charity. If Protégé wins, it wishes the money to go to Absolute Return for Kids, an international philanthropy based in London. Buffett has designated Girls Inc. to get the money if he wins.

The party holding the money — that zero-coupon bond — is Long Now Foundation of San Francisco, which oversees a mechanism called Long Bets that will pay off the bet. Both Buffett and Protégé have posted arguments on Long Bets’ Website that explain why each thinks its bet will win.

–The writer of this article is a friend of Warren Buffett’s and the editor of his annual letter to Berkshire Hathaway’s shareholders.

This year there are several Long Bets and Predictions up for adjudication.  We will be contacting these bettors this year to ask them to make a self assessment of the bet, if the parties cannot come to an agreement we will make a determination.  Some wont be decided officially until the end of the year, but we may have passed the tipping point on some of these already.

We welcome your input as comments on this thread…
A profitable video-on-demand service aimed at consumers will offer 10,000 titles to 5 million subscribers by 2010.

The U.S Department of Transportation Bureau of Transportation Statistics (www.bts.gov) will report a lower number of total highway vehicle miles traveled in 2010 than in 2005.

Predictions:  While we dont officially make adjudications on predictions, they are posted for the world the judge.  Tell us what you think.

By 2010 more than 50 percent of books worldwide will be read on digital devices rather than in print form.

Within 5 years all power plants will be converted to full-spectrum laser-fired—all oil/gas/coal/nuclear power plants will be obsolete and retired.

Within the next 5 years, Google employees will become dissatisfied, and kick-start a new wave of new technology and prosperity in Silicon Valley.

The world will not reach ‘Peak Oil’ by 2010.

There will be a quantum computer with over 100 qubits of processing capability sold either as a hardware system or whose use is made available as a commercial service by Dec 31, 2010

By 2010, the use of dial-up modems will represent less than 5 percent of all Internet access (represented as a percentage of all households) in the United States.

The U.S. will not pull all of its troops out of Iraq until the 10 largest corporations in the U.S. use their influence to make it happen. I don’t see this as a possibility until after Nov. 9, 2010 the next mid-term elections.

Stewart brand set over this excellently illustrated set of failed predictions listed over at oddee.com. Excerpts below:

“It will be years –not in my time– before a woman will become Prime Minister.”
–Margaret Thatcher, October 26th, 1969.

She became Prime Minister of the United Kingdom only 10 years after saying that, holding her chair from 1979 to 1990. But she wasn’t all that wrong since she is the only woman to have held this post. Maybe she should have added the word “again.”

“Rail travel at high speed is not possible because passengers, unable to breathe, would die of asphyxia.”
–Dr Dionysys Larder (1793-1859)

It may sound impossible to Dr Larder, professor of Natural Philosophy and Astronomy at the University College London back in the 1800, but in 1939 the first high speed train went from Milan to Florence at 165 km/h (102.5 mph). Thankfully no one died. Nowadays these trains go at 200 km/h (125 mph) and faster.

This also reminded of what has become my favorite bathroom reading: The Experts Speak by Christopher Cerf and Victor S. Navasky.  It is a brilliant listing of predictions and quotes like the ones above organized by category.  I have been paying attention to books and listings of future predictions since we started the Long Bets project.  The Experts Speak is most certainly the best compendium  I have come across to date.  It turns out there are several books and lists like this as they are endlessly entertaining.  What is curious though is how little attention is paid to good predictions, I have yet to find a good list or book about successful predictions.  I cant tell if its because there are so few correct predictions, or just because they are less interesting to us.

On a side note, the way I found the book was by a round about recommendation from Douglas Adams of all people.  In his last book Salmon of Doubt Adams discusses The Experts Speak along with Stewart Brand’s original idea for Long Bets as he wrote in Clock of the Long Now.

It took a while to get all the numbers crunched, but the first year’s results from the Long Bet with the highest prize are in.  Over a year ago Warren Buffet challenged the managers of several funds-of-funds to outperform the S&P 500 over a 10 year period.  A one million dollar charitable donation is on the line and so far Buffet’s opponents, Protege Partners, are doing less bad.  Carol Loomis, author of the original story on the contest, gives us the details:

Remember “Buffett’s Big Bet” (see fortune.com), in which the noted
investor and Ceo of Berkshire Hathaway maintained that an S&P 500 index
fund would outperform five funds-of-hedge-funds over 10 years? Well, the
results for the first lap, the ago-nizing year of 2008, are finally in,
and the funds-of-funds soundly whipped the index. Vanguard’s S&P 500
Admiral shares, the index fund “bought” by Buffett, were down 37.02%. on
the average, and net of all fees, costs, and expenses, the five
funds-of-funds backed by Buffett’s opponent, Protégé Partners llC, a new
York money-management firm, delivered –23.9%.

Considering that hedge funds can and do sell short, and that they are
not limited to investing in stocks, Protégé’s victory in a bear market
year like 2008 was not surprising to anyone involved in the bet. Ted
Seides, the Protégé partner who engineered the bet with Buffett, says
that until September of that year the five funds-of-funds were in fact
doing well enough that they still anticipated achieving the up year that
hedge fund seek to deliver, even in difficult markets. “But when markets
failed in the aftermath of the Lehman bankruptcy,” says Seides, “the
funds couldn’t avoid the storm.”

Which funds are these, you ask? The bet stipulates that their identities
would not be disclosed. Buffett, however, knows their names and has seen
their audited results. About his trailing position, he says, “I just
hope that Aesop was right when he envisioned the tortoise overtaking the
hare.”

The reader will note that we said the results of the bet are “finally”
in, and therein lies a little story. originally, the thought was that an
update on the bet would be announced each year at Berkshire’s annual
meeting, held in late spring. But the five funds-of-funds did not have
audited financial statements at that time, which made Buffett unwilling
to announce results. only in late october, when the last of the five
funds finally delivered its audited figures to Protégé, were complete
results known. They were very close to what Protégé had earlier
estimated they would be, so it is likely that next year Buffett will
indeed announce 2009 “approximate” results at Berkshire’s meeting in the
spring.

The author of this article is both a friend of Buffett’s and the editor
of his chairman’s letter in the Berkshire Hathaway annual report.

Found while reading Charles Stross’ web diary is this wonderful link from 02000 Forbes Magazine on where computers would be in ten years… now just a few months away.  Some gems:

Within 10 years, in fact, silicon will fall to the computer scientist’s triple curse: “It’s bulky, it’s slow, and it runs too hot.” At this point, computers will need a new architecture, one that depends less on electrons and more on… well…what else? Optics. 

Optical computers still seem about ten years away even now.

The PC will be protected from theft, thanks to an advanced biometric scanner that can recognize your fingerprint.

They got that one bang on.

  You’ll communicate with the PC primarily with your voice, putting it truly at your beck and call. 

Not so much.  While there are decent voice control systems for limited applications, I would not call voice based computing a mature technology.

In 2010, a “desktop” will be a desk top…in other words, by plugging our computer into an office desk, its top becomes a gigantic computer screen–an interactive photonic display. 

It is certainly true that this type of computer has come out, not quite a standard yet though.

What do we do with our 2010 computer when we arrive home after a long day’s work? Plug it into the wall with a magnetic clamp and watch as our home comes to life. In essence, the computer becomes the operating system for our house, and our house, in turn, knows our habits and responds to our needs

Hmmmm.  There are more computer controlled home appliances now, but my bet is this will happen more with smart phones than PCs (like Apples Remote app for the iPhone).

The disk will be holographic and will somewhat resemble a CD-ROM or DVD. That is, it will be a spinning, transparent plastic platter with a writing laser on one side and reading laser on the other, and it will hold an astounding terabyte (1 trillion bytes) of data

Bingo! sorta….  Yes you can buy a 1 terabyte hard disk at Best Buy, but it sure isn’t holographic storage.

Our 2010 CPU will operate on the same principle as today’s PCs. But instead of electronic microprocessors providing the brains and brawn, our future CPU will have optoelectronic integrated circuits (chips that use silicon to switch but optics to communicate).  With communication between components no longer bottlenecked by electronic transmission, we can probably push the clock rate to 100 gigahertz, 100 times faster than what’s available now. 

Well I am writing this on a two core 3 Ghz  computer, and there are 8 core versions commercially available, but we certainly have not reached 100 Ghz.

Our main RAM will be purely optical, in fact, holographic. Holographic memory is three-dimensional by nature, so we can stack up any number of memory planes into a rectangular solid to create 256 gigabytes of optical main memory, 1,000 times as much as a really powerful desktop computer today. 

Again no optical RAM, and machines seem to be selling with around 2-4Gb of the old standard silicon in them.

Nice work Forbes for putting some actual testable predictions out there!

Stewart Brand sent me this excellent piece by past Seminar Speaker, historian and author, Niall Furguson.  It is a retrospective of 02009, bravely published a year in advance.  An excerpt from the intro:

“It was the year when people finally gave up trying to predict the year ahead. It was the year when every forecast had to be revised – usually downwards – at least three times. It was the year when the paradox of globalisation was laid bare for all to see, if their eyes weren’t tightly shut.”

The piece is impressive for a historian, as it puts his written history into the territory of the future.  And aside from letting his McCain adviser status show fairly bluntly, I think it is an unfortunate but likely scenario.  The main take away for me is that it reinforces the idea that the borrow and spend economy cannot sustain, it will always have to brutally correct at some point…

“With total debt above 350 per cent of US gross domestic product, the excesses of the age of leverage proved difficult to purge. Households reined in their consumption. Banks sought to restrict new lending. The recession deepened. Unemployment rose towards 10 per cent, and then higher. The economic downward spiral seemed unstoppable. No matter how hard they saved, Americans simply could not stabilise the ratio of their debts to their disposable incomes. The paradox of thrift meant that rising savings translated into falling consumer demand, which led to rising unemployment, falling incomes and so on, ever downwards.”

 The Foreign Policy journal has an excellent top ten list for 02008.  Top ten worst predictions.  This type of accountability is exactly why we started Long Bets. Excerpts below:

“[A]nyone who says we’re in a recession, or heading into one—especially the worst one since the Great Depression—is making up his own private definition of ‘recession.’” —Donald Luskin, The Washington Post, Sept. 14, 2008

“If [Hillary Clinton] gets a race against John Edwards and Barack Obama, she’s going to be the nominee. Gore is the only threat to her, then. … Barack Obama is not going to beat Hillary Clinton in a single Democratic primary. I’ll predict that right now.” —William Kristol, Fox News Sunday, Dec. 17, 2006

“There is a real possibility of creating destructive theoretical anomalies such as miniature black holes, strangelets and deSitter space transitions. These events have the potential to fundamentally alter matter and destroy our planet.” —Walter Wagner, LHCDefense.org  regarding the Large Hadron Collider

I met Derek Dukes the other night the founder of Dipity, the maker of the coolest web based timeline software I have seen yet.  You can manually generate timelines, or set up a timeline that is auto-generated out of RSS feeds, Twitters, Facebook updates, etc.  He set up a timeline for Long Bets in about 10 seconds based on the Long Bets RSS feed (seen embedded above).  They are still working on some of the longer term timeline issues like the BC problem.

The Cambridge Betting Books, From England 08

While visiting the UK last week my wife and I were invited to high table dinner at Cambridge’s Caius College by a friend who is now a fellow there.  Touring the grounds was stunning, that all of those gorgeous buildings and ancient libraries could be there for you as a student is so impressive.  High table is where the fellows (professors) like Stephen Hawking eat at the college — Harry Potter style overseeing the students.  When not in term, as it was for us last week, they eat in a separate set of rooms.  After dinner we retired to the “desert room” which was built around the 1300′s I believe, and was paneled in wood from one of Her Majesty’s famous wooden ships.  After some port and claret was served, we were told about the “betting book”.  Apparently since the late 18th century they have kept a book in this room to record predictions and bets made at the table as people like like Francis Crick got drunk in the wee hours.  In the room they only had the most recent book, which had more recordings of presentations of bottles of wine than bets and predictions.  But the following day I went to the library and saw some of the older texts.  Unfortunately time was limited so I did not get a chance to look through them all (I would love to find a student there to help catalog it!).  But I found a couple good bets while looking through…

A page from the second oldest betting book I came across, From England 08

This bet from March of 01817 reads “W.White bets Mr Standby that if a Person call a woman a Wh—e they may have a Remedy of Common Law.” I am not at all sure, but it seems like the W word is Whore, and they are referring to a way someone might avoid having their mistress receive common law marriage rights to property.

And the below image is of the first entry in the oldest betting book I found. It reads “March 10, 1789, On the memorable day in which the Parliament was opened by commission after the Kings Recovery.”

The first entry in the oldest betting book I found, From England 08