How to make a better decision(book review of “The Signal and the Noise”)

Which animal would you think defines a good forecaster, fox or hedgehog?

The hedgehog knows one big thing, but the fox knows many little things.

If an original method is not surely working, the hedgehog is reluctant to change, but the fox is tolerant of complexity and is adaptable to find a new approach. That is why the author suggests being foxy is a right attitude toward a good forecaster.

We live in a world in which information is pervasive so that the gap between what we know and what we think we know is widening.  As the study has shown, even the experts usually make incorrect predictions. For example, the probability of the skyscraper being crashed into by the terrorists is 0.05%. The possibility would rise to 38% given that the first building is under attack.

Today’s Forecast is the First Forecast of the Rest of Your Life

If we could use one of the principles, “Today’s Forecast is the First Forecast of the Rest of Your Life” in this book, we could make a better forecast possible today—regardless what we said yesterday, last month, or last year–   and prevent the formidable catastrophe from happening.

Other suggestions the writer proposes are below:

  • Think probabilistically: Acknowledging the real-world uncertainty in our forecast.
  • Look for consensus: It’s not easy to be objective. Other options could help us see the world in different viewpoints to reduce biases.
  • Weighing qualitative information– accounting for the qualitative information along with quantitative factor

This book is a little long but readable, not a formula-heavy, general science book. It consists of four sections.

The first section considers the failures of predictions in finance, baseball, and politics. Then, the author gives the readers some advice about how we can apply our judgment to the data without succumbing to the biases. The second section focuses on dynamical systems (weather, economy, earthquake, and economy) that make forecasting more difficult. Following the third section, it turns toward a solution by an introduction of Bayer’s theorem. Finally, the discussion of applying Bayer’s theorem to more existential types of problems.

Other suggestion:

If you’re interested in general science books or statistically forecasting, please enjoy it. However, if you are the audience who need depth in measuring and making data-driven decisions, you might not appreciate this book as much. I would suggest to read “How To Measure Anything” by Douglas W. Hubbard.

Nudge your mind, book review of “Nudge: Improving Decisions About Health, Wealth, and Happiness”

Have you ever tried to set a new year resolution such as weight-losing but giving up in the end? Such things usually happen!

For example, on Saturday morning, people might say they prefer exercising to watching TV, but once the afternoon comes, they are on the couch watching Netflix. How can such behavior be understood?

The author of “Nudge”, Nobel behavioral economy award, introduced two factors, temptation and mindlessness choosing, to explain this phenomenon.

The term “temptation” is easier to recognize than to define. We call something tempting if we consume more of it. Mindlessness choosing can be explained in many situations when people put themselves into an “auto-pilot” mode, in which they are not actively paying attention to the task at hand.

We usually think we can decide for ourselves. In fact, many effects around us influence our behavior, and we even don’t know about them. That’s why most people will use some self-controlled strategies to overcome this kind of issues.

By reading “Nudge”, we could understand these effects and use what the writer called “nudge”, a small and subtle pushes, to make decisions between real-world choices and then improve our life.

While some of the anecdotes are funny, many of the writer’s proposals contain the America social and economic issues that will take a while to comprehend for a reader of a non-American.

Until you are fascinated by these scenarios the author is addressing, I would suggest others read related books that explore in a much more engaging way.

Tell a story like a script director, book review of “Storytelling with Data”

Tell a story like a script director. Present a slide like a designer.

The author, Cole Nussbaumer Knaflic, uses simple examples and explains to every reader about how to communicate to audience using data.

You could implement these concepts by hand. Learning how to use PowerPoint well doesn’t mean you could give an excellent presentation to the audience. You must display your idea like a well-trained designer and tell a story like a Hollywood script director.

So, the author borrows some professional elements from design and script-writing such as affordance, acceptance and storyboarding. In the chapter of “case studies”, the author demonstrates how she would fix the not-so-good graphs by the concepts covering in this book.

Telling an emotional or persuasive story using data is a hard work. If we don’t consciously recognize that this takes time to do well. We run the risk of losing the potential opportunity to drive change and action.

This is the final step the audience will see. We should devote our time to storytelling with data.