How To Measure Anything (HTMA) Series

  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 ...

  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 ...

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...