vault backup: 2025-07-08 07:25:20

new-additions/the-failure-of-risk-management.md

@@ -6,8 +6,10 @@ by Douglas W. Hubbard
 
 ## Key Takeaways
 
-Qualititative risk analysis
-(i.e. risk matricies, scoring charts)
+### Qualitative Metrics Must Be Avoided
+
+Qualitative risk analysis
+(i.e. risk matrices, scoring charts)
 departs from legitimate statistical methodology
 and has no robust evidence to suggest its efficacy.
 There is good reason to believe that such methods
@@ -15,11 +17,26 @@ are deleterious to their intended purpose
 in contradiction to the common response
 that they are "better than nothing".
 
+### Utility as a Measure of Value
+
 Expected Value (Probability × Magnitude)
 alone can not predict or inform risky decisions,
 except for risk-neutral parties.
 People and organizations are risk-averse
-~~TODO: see chapter 6~~ 
+...
+
+* [ ] Finish this paragraph.  (see chapter 6) ➕ 2025-07-04
+
+### Expert Opinion Must Be ~~Adjusted~~
+
+Expert opinion is valuable despite its flaws.
+...
+
+The book details the statistically observable tendency for people
+to underestimate risk and to be overconfident in their beliefs.
+It describes the process of "calibration"
+by which people can be trained to compensate for this bias
+and make predictions far more accurately.
 
 ## Mentioned Topics and Abbreviations