- Every event has multiple outcomes and its important to go beyond the simple 0 or 1 outcome we are used to
- Gather as much information as you can before arriving at a decisions and define a probability score for the event. Keep clear notes on how you arrived at the value for future improvement
- Apply?first principle thinking?to new situations, asking yourself simple basic questions before searching for data and arriving at a probability score for an outcome
- Update your probability score based on latest data. Apply logic of?Baye's Theorem?to arrive at new score after every update
- Humans tend to think in Yes No or Maybe. However, this 3 dial mode is incorrect as we tend to take things for certain in 2 cases but its not so.?
- Always be very clear with your forecast and not vague. Be as numerical as possible, define time frame and all aspects which can be read in some other manner
- Important to develop a more probabilistic approach towards any issue
- Understand that in the end you are just stating a probability of the event happening and despite best chances, there is always a chance that event may not happen and thats why the probability score is not 100%. Even if its 100%, its just an indication that from all the data that we have collected, the event has always happened and its important that there is a chance of it not happening this time around
- When asked to predict, adopt the fermi style questioning approach in same way as we do guesstimates. The more fundamental questions that you ask, the more the chances of accurate prediction. In simple terms, start by assessing via first principle thinking. Identify the most fundamental fact that is not questionable. Try to limit your assumptions to bare minimum so that you can take it forward
- When making an estimate always take an outside view and try to get the stats from that outside view. Use stats collected from outside view as base rate and adjust your estimate accordingly?
- Its always important to read as much as possible to update on your estimates
- Always work from your base rate as possible and not getting swayed by emotions
- Don’t overestimate or underestimate any probability due to any events
- Use concept of Bayes theorem to ensure that your probability improves on basis of base rate
- Always work to find data which proves the opposite of what you believe has higher probability
- Work on what data can I get to prove my opposite hypothesis true
- Always try to be as accurate as possible for the probability calculation
- Be as accurate as possible to lower numerical value
- 60% is better than 50-50
- 65% is better than 60% or 70%
- 64% is better than 65%
- Try to always keep the same figure so that you are clear on ur ideas
- Update your estimate step by step on basis of new data
- Don’t get too stuck on earlier opinion but also don’t get too much swayed by new info. Important to keep making small adjustments to your estimates on basis of the info
- It always important to keep taking feedback on your prediction and then learn on why you screwed up. Always analyse why you got it wrong and learn i.e. adopt the growth mindset?
- Keep notes on why you made a certain prediction so that when you analyse you know for sure about your thought process back then
