Another example of Survivorship bias

Last week, I met a friend who told me that "No one returns alive from ____ hospital". That hospital being one of the three big branded hospitals of Hyderabad where another friend's wife was in critical condition.
That statement caught me off guard. He further mentioned that he knew 5 people who were admitted there but no one ever returned back alive.

I also knew one more fact that one of the other Big branded hospitals had refused to take the case of the friend's wife.

Knowing this, I argued that, maybe this hospital being one of the biggest ones in Hyderabad has a more risk taking ability for the type and condition of the patients. After all, if all the different entities are the same, then there is no real democracy and no decision making and no differentiation.

Just giving an example. Maybe, they wanted to give one last chance to even a 5-10% chance which other people refuse compared to others who give a chance maybe only to 50% and above.

This high risk input could cause the statistic that my friend was quoting.

I wanted to relate this incident and my thought process to a story I have come across previously from World war.

During World War II, a statistician named Abraham Wald used survivorship bias to determine where to reinforce returning aircraft with armor. While military leaders initially wanted to add armor to the areas with the most bullet holes (like the wings and fuselage), Wald realized that these were precisely the areas where a plane could sustain damage and still return. He argued that armor should be added to the areas with few or no bullet holes, such as the engines and cockpit, because planes hit there were unlikely to survive and return to base.

https://en.wikipedia.org/wiki/Survivorship_bias

The concept of Survivorship bias is there in both. 

Now, imagine this friend with this bias taking a decision on someone's life. They would never get the 5-10% chance the big hospital was willing to give.

Asymmetricity

Case A: 

I have heard of Asymetric warfare multiple times. Mostly used in the context of Guerrilla warfare and drone warfare. 

Why is this asymetric? 

Because low cost things and tactics can overcome high cost professional things and tactics.

The cost and the results make the investments asymmetric.

Case B: 

Private equity takes asymmetric bets knowing very well that only 1 or 2 companies in the portfolio gives outsized returns and makes far more money than the losses incurred in the other companies.

Case 3:

A 10 X thinking involves taking calculated risks where the upside far outweighs the downside.

10x thinkers know not every bet pays off, but one great one can change everything.

Case 4:
Usually, for a company out of all the products, there would usually be 1 or 2 product categories that gives disproportionate profits or are asymmetric.

The pattern across things is that Asymmetric investments yield outsized returns.

It takes a lot of research, knowledge to identify asymetric opportunities.

In conclusion, asymmetric thinking is a way of thinking or provides a framework to think.

Common sense and/or application of mind

What differentiates smart people and dumb people or idiots?

It is the power of common sense, a keen eye to observe things, validate what they hear or read, not take things for granted. It is about application of mind on simple things and not doing things blindly or mechanically. A lot of graduates know or taught only doing tasks and not application of mind. Over a period of time and a lot of skulduggery of their bosses and by learning from mistakes they become wise and start using common sense. They start perceiving information and how to relate it to what they already know. But some people are unwilling to learn or disinterested to learn and are sometimes pre-occupied with other than office work to continue being ignorant and committing a lot of errors and blunders at which point in time they are either given lesser responsibilities or are forced to leave the organisation.

A major part of the ability to think on things and apply their minds and be conscious of the environment and data while performing a task or taking a decision is dependent on the way the people are brought up during their schooling or college days. The environment, the people and the projects that encourages them or forces them to think through things is the key to understand how things work and what things affect and how they affect a certain object/objective. This enables them to do a self check with readily available knowledge/information in their head to understand the trade offs and take a decision or perform the task right in the first instance.

Curiousity is another factor that enables people to learn and apply their minds. Curiousity also leads to creative thinking and adds value to things and brings about new solutions. Curiosity too is a factor that has to be encouraged in the childhood and cannot come suddenly at an old age. This factor in turn can be identified and leads to a talent.

Determination helps people focus. Another key factor that avoids innumerable distractions and stops others needs taking over your identified goal. This also allows people to bring more of their resources (time, money, connections, etc.) to the goal instead of using their resources to do other things.

So, to be smart and use common sense, encourage people to increase their curiosity and help them achieve their goals for them to see the value of their goals achieved through determination.

Government's lack of application of mind

The government of India does not seem to apply its mind thoroughly these days. It makes half baked implementation policies. Not many months ago, in the middle of the financial year when the government decided to reduce the subsidies on lpg, it said 6 subsidized cylinders per household, without mentioning whether it was calender year or financial year and whether the subsidy would be provided on a pro rata basis or fresh starting from that month. 

This lack of clarity caused a lot of confusion and harassment to the customers and the sellers of the lpgs (the big 3 Oil Marketing companies). Now, the government has yet again gone the same in another place. Applicability of Service tax on air conditioned high end restaurants from April 1, 2013.

As mentioned here, http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/new-service-tax-from-april-1-ambiguous-on-host-of-entities-like-home-delivery-chains-take-away-joints/articleshow/19313468.cms

the tax is actually to be levied on service, but where is the service element in take aways/canteens/mess, etc.? In the absence of this, many chains including McDonalds have started applying service tax on the bills on the safer side. If the government later clarifies that they are out of the ambit of the service tax and refunds the service tax collected to the companies, as there is no way to return the money back to the customer, the companies would end up making a good profit as they sieze on it.

On another angle, most restaurant business run a scam/sham of getting the customer's money by charging service charges and a service tax on the whole bill which is itself a fraud (by design or ignorance). More on this here:

http://www.business-standard.com/article/pf/how-restaurants-can-overcharge-you-113032600554_1.html

The lack of government's application of mind is helping the people give away more of their money to the already crooked restaurants.

Dumb Charades

A simple game like Dumb Charades (sometimes if modified a bit) is a great exercise in thinking and communication.

It can be played beyond movies into other things like contradictory/funny/naughty phrases, and it is not just a source of good fun, but a lot more. To give the phrase, one has to think hard and creatively to find something that is not just hard, but funny too. Something what advertisers are always trying to do. The next is to put yourself in other person's shoes and judge whether the word/phrase can be decoded easily by the rival or not.

On the other side of the game, having a phrase/word, you need to think of multiple ways to get the phrase communicated by breaking it down and expressing it logically to the team mates. You also have to read into their minds and see if they can interpret your expressions (again, putting yourself in other person's shoes) and then guide them towards the word.

Dumb charades is a great way to improve lateral thinking.

The Suicide knot

Ever wondered the misery of a poor fellow who has decided to commit suicide and on the selected day, at the time when he/she is alone in the room, and with the rope in hand, he/she gets frustrated that he/she is unable to tie the knot - the 'Suicide knot'.
Take an unrelated topic: we all have seen the lasso in many a cartoons and a few cowboy movies. It seems simple, but if I ask you to make me a simple lasso, do you know how to make it?
Ok, can you atleast tie a tie?
It may seem that most of us, the vast majority don't know how to do the first two, but may know the third, but in reality it is not so. It is just that you don't know that you know it already.
Here's the secret: If you know how to tie a tie, you know how to tie both the suicide knot and the lasso. Because it is all one and the same.
Lateral thinking...using a solution from one problem to solve another problem.

Useless Debates

The debates we take part in in schools are unrealistic and non-practical. The world doesn't and can't function from an extreme point of view. Maybe these debates may play a part in a students' narrow thought process by not accepting the whole picture or talking about things he/she doesn't believe in. Why should kids at a young age take stands on issues where the best solution in the real world is usually the middle ground.

If indeed the students' thought process has to be evaluated, his vocabulary and speaking skills have to be tested, let there be a competition of how should certain problems be solved instead of blind arguing as in a debate.

Let big or small or technical problems be thrown to this non-brainwashed people to come up with maybe some very innovative solutions.

How should India tackle the China threat? Or what kind of new design will you make for machine that has to clean up mines. What kind of mobile games would be a hit with adults or children?

Why not make the students really think, discuss and speak about it? 

Guess what, Nokia went to kids around the world and asked them to draw what they would like their mobile to look like with what features. And, this is how even big companies get ideas for the future.

Lets make tomorrow's future think about the future rather than make them recite about the past and argue about the present.

Ideal personality: Why MBTI is so not right..

When I first knew about the MBTI test (http://en.wikipedia.org/wiki/Myers-Briggs_Type_Indicator) and that I was supposed to take it, I thought I was definitely strong in some areas and was kind of in the middle for some of the other parameters.

I was administered the MBTI test at my management school and I found it very hard to choose one of the two answers when asked to choose from. I had fair amount of instances on either side and if it was another day, I could have as well ticked the other option. With many a questions in limbo, I didnt really feel the test helped in testing me, or I was not quite the normal guy falling quite clearly in such sharp black and white categories (as it should have been perhaps).

Somewhere down the line in the last 1.5 years, I have been able to see that all for each pair of MBTI, one preference or the other is more beneficial depending on the circumstances. Sometimes, keeping your mouth shut helps to prevent further embarrassment and trouble, while at times going out of way to shout out your point is beneficial.

 

Similar with Sensing and iNtution. Wiki says { Individuals who prefer sensing are more likely to trust information that is in the present, tangible and concrete: that is, information that can be understood by the five senses. They tend to distrust hunches, which seem to come "out of nowhere". They prefer to look for details and facts. For them, the meaning is in the data. On the other hand, those who prefer intuition tend to trust information that is more abstract or theoretical, that can be associated with other information. } Again this preference is and should be based on the situation (or atleast that is how I have always used it). Without intution, how else can one even try to understand such vague things like atoms, their chemistry, radio frequencies, nuclear physics, integration and differentiation in mathematics, visions of leaders, faith on god, etc. On the other hand, how can you ever make a sound decision without any basis. Both extremes seem ridiculous.

If you think over it, even the other two pairs will be like that.

 

MBTI test says that these are personal preferences only and nobody can be a perfectly any of the 16 different conmbinations and it is not strictly a type to be classified into. People do exhibit both sides of a pair. The point why then classify it like that? Why not have three things instead of a pair. The third should be the center region in between the extremes of the pair.

And that I think is the perfect personality!

A person capable of being in neither of the MBTIs, but right in the center for all the four pairs and one who feels most confused as to what he really is after being given the test. He will be the most suitable in the ever so dynamic situations of the current and future worlds where prefering different ways to different situations and maybe even different ways for same situation at a different time is required. [If you understood the last statement, I assure you that you will qualify as "intelligent and wise" in Ajit's Intelligence test ;) ]

A perfect personality is a flecible one capable of handling a delicate as well as a hard situation. He is flexible in approach and knows when to stick to what and what is to be achieved. Extrovert helps in life to make new friends and contacts and achieve the unimaginable but being introvert and doing your own work is beneficial when you have a job in hand to complete all by yourself. The perfect personality should be able to do the right mix of both extremes right one after another or sometimes even simultanoeusly. e.g: Being introvert while being extrovert like when you go to a party and introduce yourself or make an effort to meet up someone(extrovert behaviour) but hardly talk anything (introvert behaviour). It is in a way like playing good cop, bad cop alone and seeing which is the best way the situation can be handled and then choosing the suitable role.

The guidance

http://average-everyday.blogspot.com/2009/07/blog-post.html

Pasted here for easy readability:

The Fiction-

"Papa, He took my ball...... took my ball...."

The child came whining at the top of her unbroken virgin voice.

"It's your ball. Right??"

The six year old looked up at her father and nodded.

"So, What are you going to do about it??"

The sharp question put the child to silent thinking.

Her father just smiled.

Author's note-

A child is an individual with it's own thinking, capabilities and creative intuition. More often I come across parents who feed their children on what to do, rather than kindling their own child's problem solving quotient. In a culture like ours, where kids stay with the parent until almost they get married, I think parents guide their children a little too much.

After all, how many times have we heard parents saying- "I made all the decisions for her till now. I care for her. So wouldn't it be appropriate for me to find her a good suitor."

Parenting is a gift, a bliss. To see a child make it's own mistakes, it's own choices and to take part of it's tears and laughs in it's life is a privilege in it's own right.

Two sides of a coin

I learnt a trick that is really useful for making decisions in this web world. Usually, when we don't understand a specific topic or want to know about something, we do a search of the topic in google or do the search on wiki. This is ok. But when you need information on topics that you going to make you decide on something important, this is not enough.

Eg: Say you are planning to buy a product made of Neem(a tree) for your family and assuming you didnt know about Neem before. Doing a google links gives wiki as the first link. I went through the page and understood all its benefits.

Now, does that mean I can just buy it and use it? Could there be any harmful effects of it?

So now I do a google for the words 'harmful neem' and I got multiple links saying the harmful effects of neem on children and on pregnant women.

This is my learning from my finance prof. Deepak Kapur: Do the google search as before and then do a google search with the contents "problems" along with the topic. The word problems/harmful effects, etc will give you the lesser known criticising view of the topic at hand. This tip/trick can be used to gauge the problems related to companies in the stock market to increasing your knowledge and for being more decisive and critical in your thinking.

Evolution & Energy

I just loved this train of thought... 
http://dilbertblog.typepad.com/the_dilbert_blog/2008/04/evolution-dmd.html http://dilbertblog.typepad.com/the_dilbert_blog/2008/05/gravity-battery.html

Fear factor

When I booked my train ticket from Chennai to Ahmedabad on 3AC, I had 9 available seats last week and I got one for me. Interestingly, when I travelled in the train, I saw far more than 8 empty seats in 3AC. So it means only one thing - Many of the people have cancelled their tickets. The Reason - Ahmedabad is unsafe after the bomb blasts. Well, I dont think so. You are as safe or unsafe in any other city in India as you are in Ahmedabad barring certain parts of Jammu and Kashmir and naxalite prone areas where the risk level is usually at higher levels. On the day (friday) of the Bangalore blasts, I am sure I would be one of those very few people who had a thought crossing the mind that they had wished that they were in Bangalore on that weekend so that they could catch a movie in theater on that saturday or sunday. Oh! come on. Stop cursing me now.