Business
Let us talk about data analytic namely let us talk today about unpredictability by following the logical steps First do you believe that you can use data to predict systematically what is going on? Please write your answer down. Second question. Are you aware of something we call world of finance or Wall Street? Third question. How many correlation metrics or data do we have in 2007 before the financial crises? How large it was or how big it was? Answer: Between half a billion and a Billion correlation we had in finance .Guess what/Nobody knew what the hell was going out there and most importantly the pundits and experts. So as direct conclusion data is not what we needed or wanted .Just as a good friend of mine who is actually a mentor went to Washington to testify against spending more money on data – since we get confuse by data. The congressman told him – Sir John when you cross the street you don’t look When I cross the street I remove data- because you have billions of information, all what I am interested in is crossing the street – I am not interested of the eye colour of drivers or what is their intention – how are they dress, I am only interested in large items that are moving. Hence I apply via negative”PS “,yes the more data you put in, the less you are going to see. Financial crisis after the event, we are very good at looking through the review mirror with the firm conviction we are looking straight ahead – in another words we have the inability to prospectively predict and the ability to retrospectively predict. This a problem of human nature, finds usually in social science and not in hard science. Another example; Take the Skinner's box experiment.BF Skinner took a pigeon and put in a box and fed the pigeon randomnly.Over time the bird thought, by standing on one leg it was fed last time – it does it again, it will be fed again .All what I am saying is that we human have a tendency to immediately establish the cause too quickly even when we do not have reason to establish cause. Yes we favour the visible, the tangible, the well narrated and we scorn the abstract. So we are shifting from predictive method to the assessment to the effect of something you are exposure – in another words are you fragile or are robust to some class of exposure. -The one big idea to take away is that fragility is vastly more important in place of predictive analytic in the sense where fragility is much more measurable and much more rigorous approach by trying to confuse people by making prediction that cause people to take more risk