Statistical and applied probabilistic knowledge is the core of knowledge; statistics is what tells you if something is true, false, or merely anecdotal; it is the "logic of science"; it is the instrument of risk-taking
Nassim Taleb
You got to hand to the guy: he is passionate about his subject. Of course, he's also the first person to tell you that his most infamous invention, the "Black Swan", is black--that is, extraordinarily rare--because there are no statistics to predict it.
Two of the more useful properties of statistics are these:
- They are predictive because they are surrogates of a past track record
- They are persistent in the sense that they are survivors: wait weeks or months and if the circumstances haven't changed, neither have the statistics.
- There's merge bias at milestones; they are inherently weak objects in the schedule
- Diversification follows the sqrt(N) rule: diversify into 4 independent events, and get a 2:1 improvement in risk
- Expected value is usually more pessimistic, and therefore more conservative, than most likely
- Expected utility value is not objective, and subject to many biases
- Independent events tend to centrally cluster--the theory of central tendency
- A sample of a large population can be an economic approach that saves time and money
