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Measuring the risk of rare events: The chance of a launch failure of a rocket that has never flown before, or another September 11 attack, another levee failure in New Orleans, or another major financial crisis can all be informed in valuable ways through observation and reason.
black swan?
Take the highest and lowest values in the sample of five: 30 and 80. There is a 93.75% chance that the median of the entire population of employees is between those two numbers. I call this the “Rule of Five.” The Rule of Five is simple, it works, and it can be proven to be statistically valid for a wide range of problems.
almost certainly
1. Your problem is not as unique as you think. 2. You have more data than you think. 3. You need less data than you think. 4. An adequate amount of new data is more accessible than you think.
perhaps in another field.
What does improved IT security look like? What would we see or detect that would be different if security were better or worse?
defining observables
OODA loop and MG Hall's system of thought is a measurement of uncertainty, certainty and risk.
In statistics, a range that has a particular chance of containing the correct answer is called a “confidence interval” (CI). A 90% CI is a range that has a 90% chance of containing the correct answer.
the vast majority of those are overconfident
odds makers and bookies were generally better at assessing the odds of events than, say, executives.
“anchoring” by estimators. Researchers discovered that once we have a number stuck in our head, our other estimates tend to gravitate toward it.
“Are you 95% sure it is over/under this amount?” cures our tendency to anchor.
ACH for measuring
Instead of starting with a point estimate and then making it into a range, start with an absurdly wide range and then start eliminating the values you know to be extremely unlikely.
asking better questions
duality
VKE
the things that get measured just don’t matter as much as what is ignored.
First, we know that the early part of any measurement usually is the
high-value part.
Measure a little bit, remove some uncertainty, and evaluate wh...
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Be Iterative. The highest-value measurement is the beginning of the measurement, so do it in bits and take stock after each iteration.
reduce our uncertainty further—in other words, measure it.
Decompose the uncertain thing so that it is computed from other uncertain things.
uncertainty reduction, not necessarily uncertainty elimination.
