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Chapter 7 - Quantifying the value of Information

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  Chapter 7 - Quantifying the value of Information Accept the fact that not all information is equally valuable for making a certain decision. Certain information is more valuable than other. If you knew what exact information was the most valuable to make a certain decision, you would perhaps straight shoot of it and not waste your energy with other kinds of information For example, when trying to get healthy, if you know the most valuable parameter to you is muscle mass, you wont waste your time with a weighing scale, rather you would go with TNT impedence machine. The McNamara Fallacy “The first step is to measure whatever can be easily measured. This is okay as far as it goes. The second step is to disregard that which can’t easily be measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily isn’t important. This is blindness. The fourth step is to say that what can’t easily ...
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Chapter 6 Quantifying Risk through Modeling

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  Quantifying Risk through Modeling It is better to be approximately right than to be precisely wrong. HOW NOT TO QUANTIFY RISK Scoring method with all that colourful heatmap is utter bullshit. There is no evidence that it works and in fact there is evidence that it works in a bad way because it increases people's confidence in their risk management without actually managing risk. More on this perhaps in Hubbard's other book called "The Failure of Risk Management", which I will have to read someday. Insurance Premiums are good example of how rightly they quantify risk to a certain dollar value. Based on the level of risk you want to mitigate, your insurance premiums will be charged. They dont score risk in these instances as "Low" "Medium" or "High" LETS TALK ABOUT THE REAL SHIT - MONTE CARLO When you have a precise value of something it is easy to add, substract, multiply and divide them, but what do you do when you dont have a ...
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Chapter 5 Calibrated Estimates : How much Do you know Now?

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  Define a decision FIND OUR YOUR CURRENT LEVEL OF UNCERTAINITY Figure the value of additional info ABSURDITY When estimating, even if you dont know the exact values, you still kind of know that some values on either end will be impossible or highly unlikely. So the least you could do is, figure out the upper limit and the lower limit. EMPTY YOUR POCKETS Just like anything else in life, you need to know where you stand first to go where you want to. Quantifying your current level of uncertainty is a key part of the HTMA. It comes after defining the decision and before computing the value of additional information. TENET Start seeing the world differently, start seeing things as repetitive occurrences and probability distribution curves. REFLECTION OF YOUR UNCERTAINITY But every estimate should accompany with a CI. What CI does is it put out a reflection of your uncertainity in the equation and thats important to be put out there, if you want to use these measurements ...
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Chapter 4 Clarifying the Measurement Problem

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Part II BEFORE YOU MEASURE Meaning this is the Part which all the items you should consider before you actually go in to measure things.  Chapter 4  Clarifying the Measurement Problem Before you make a measurement, the first thing you ought to know is - WHATS THE DECISION      What is the decision this measurement is supposed to support?      If a measurement is not leading to some decision, why are you even measuring then? Define the thing being measured in terms of observable consequences? - WHAT EFFECT IS BEING MEASURED      Is the thing increasing or decreaseing ?      Is more good or more bad? How much do you know right now? - CURRENT STATUS OF KNOWLEDGE      Empty your pockets What will you do if this happens? or if that happens in measurement? - PROACTIVE DECISION MODEL      Any threshold levels set on measurements, for respective activities What is the value of additional informat...
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Chapter 3 THE ILLUSION OF INTANGIBLES: WHY IMMEASURABLES AREN'T

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  3 reasons why people think something cant be measured. They are rather misunderstandings. Concept - People misunderstand the concept of measurement itself. Once, you get it, you will say a lot more things are measurable than you thought before. Object - The things being measured is not very well defined. Sloppy and Ambiguous language is used. Method - Many people are simply not familiar with different methods to measure things. 3 reasons why people think something shouldnt be measured. Economic Objection - Too expensive to measure General Objection to meaningless of Statistics - You can prove anything with Stats. Circle Jerking BS. Ethical Objection - Dont wanna ask the hard questions needed to measure it. The Concept of Measurement Only an inexact man would call things exact. Measurement is not perfect nor certain. Defn of Measurement - Quantitaively expressed, reduction of uncertainity, based on one or more observations. Measurement is mere reduction of uncerta...
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Chapter 2 An Intuitive Measurement Habit: Eratostosthenes, Enrico and Emily

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  SOLID QUOTE FROM MALCOLM GLADWELL ABOUT DOGGEDNESS The Chapter starts with a lightning bolt of a quote from Malcolm Gladwell, Success is a function of persistence and doggedness and the willingness to work hard for twenty-two minutes to make sense of something that most people would give up on after thirty seconds. —Malcolm Gladwell, Outliers: The Story of Success MEASUREMENT MENTORS Like I was implying in the previous chapter as I referenced Lord Kelvin, the Author specifically utters the word "measurement mentors" here, - individuals who saw measurement solutions intuitively and often solved difficult problems with surprisingly simple methods In this chapter, the Author describes three such people, from different times... One man was from Ancient Greece, who estimated the circumference of Earth, using simple geometry. Another man was Enrico Fermi, the Nobel prize-winning physicist, who.. well, who was straight up gangster at this shit. And a nine-year-old girl, w...
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Chapter 1 The Challenge of Intangibles

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  PEOPLE WHO GAVE US UNITS OF MEASUREMENT The book starts with a quote from Lord Kelvin, this is the guy who gave us the unit of measurement for Heat. I remember his weird experiment to measure heat from my school days. Its interesting that this guy is mentioned at the start of this book. In a way this quote is not just point to him, but everyone in the past who introduced any units of measurement. The whole concept of coming up with a unit of measurement requires a sophisticated understanding, so all these guys may be a potential mentor. Anyway the quote goes like... "When you can measure what you are speaking about, an express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science." Basically Einstein said, unless you can teach it, you have not really learnt it.. and Lord Kelv...
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