vault backup: 2025-10-22 17:52:07

the-failure-of-risk-management.md

@@ -116,27 +116,29 @@ evaluated as the mean squared error of their forecasts.
 
 ### Luck Looks Like Skill
 
-> Chapter 7 p.154
-
-Hubbard describes a study which concluded that,
-given the number of German pilots and their overall victory/defeat figures,
-there was a ~30% chance an individual would achieve The Red Baron's record
-_by luck alone_.
+> [!cite] Chapter 7 p.154 (pp.)
+> Hubbard describes a study which concluded that,
+> given the number of German pilots and their overall victory/defeat figures,
+> there was a ~30% chance an individual would achieve The Red Baron's record
+> _by luck alone_.
 
 He later refers to the popular tendency
 to overvalue competence and undervalue luck
 in the role of achieving improbable accomplishments
 as the "Red Baron effect".
 
+This the unstated other half of the **law of large numbers**,
+that improbable events become likely with increased sampling.
+
 How many success stories are simply cases of winning a coin flipping tournament?
 
 ### Qualitative Labels are Problematic
 
-> [!example] p. 170
+> [!example] p. 170 (pp.)
 > Experts do not agree on the bounds of terms expressing probability.
 > "Likely" vs. "Very Likely"
 
-> [!example] p. 182
+> [!example] p. 182 (pp.)
 > risk matrix type bucketing tends to inflate the significance of small risks.
 
 ### There's Always Enough Data