1748 More on risk.

Monday, March 31, 2008

If you can’t learn to do something well, learn to enjoy doing it poorly.

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I met my man at the halfway point this evening for dinner and conversation. One of the many topics was the CERN risk thing from the previous post.

I have a method for deciding on a course of action. I formulate a plan of action that seems reasonable, then I try to look at all the possible things that could go wrong. I don't consider the probability. For planning purposes I figure that each of the bad things could happen, in fact, that they WILL happen.

(I was pleased to discover that he thinks in much the same way. You can say that there's a .01% chance of something happening if you do A, but that doesn't make A safe. In reality, either the bad outcome will happen, or it won't, so it's actually 50-50, and you have to think of it that way.)

Then I figure out what I will do if that bad thing does happen, make a recovery plan or figure out a way to ensure that it won't happen. If there is no recovery or avoidance plan, then I decide whether or not I can accept the bad thing, balanced against the possible benefit. If I can't accept the bad thing, then I have to reject that course of action, and look for another.

Repeat - the probability of the bad outcome is not a consideration, only whether it is recoverable, avoidable, or acceptable.

There have been times when my death was a possible outcome, and since there's no recovery plan for that, if I couldn't find a way to entirely eliminate that possibility, I had to decide whether it was acceptable. There have been occasions when I have accepted that risk. (I can't think of a single thing where the death of my daughter would be acceptable.)

When I was working, I always had backup plans for every project and schedule. There was never an unacceptable outcome, no matter what happened. In my investing now there is no stock, bond, mutual fund, account, no single area that has more than I can afford to lose. It's possible to lose everything in some area overnight, so by spreading things out, I've ensured that a loss is acceptable.

So, back to the CERN thing of the previous post, there's a one in a bazillion chance that they will create a self-sustaining black hole that will instantaneously feed upon and destroy Earth. The scientists consider those odds acceptable. They think "Big number. Ain't gonna happen".

They've forgotten something. When you count from 1 to a bazillion, the bad thing could happen at 1 as easily as at a bazillion. Kind of like when they say that on average, 1 in 400 people die in a certain surgery. Well, when you go into that operating room, you have a 50-50 chance of being that 1 in 400. Therefore, there's a 50-50 chance a bad black hole could happen, or not happen, any point.

I DO NOT CONSIDER DESTROYING THE EARTH AN ACCEPTABLE OUTCOME! No matter what the possible benefits are.
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