A graphic like a 2x2 chart can help us see a topic. On November 13, 2023 I blogged about how A Certainty-Control Confidence Map is an excellent graphic for discussing decision-making.
I saw an article by Daniel Simons and Christopher Chabris at BehavioralScientist on July 17, 2023 titled How the Possibility Grid Helps You Evaluate Evidence Better. They used an example about picking stocks shown above via a Possibility Grid. The example really is about The Motley Fool and comes from another article by David Hanson at USA TODAY on March 12, 2018 titled 5 years from now, you’ll probably wish you grabbed these stocks. You probably will have focused just on cases (shown in green) when some winners were picked. A more complete evaluation also would include losers picked, and also those not picked.
Another colored version illustrates the questions we should ask to quantify the ability to consistently pick stocks.
Simons and Chabris discuss the Possibility Grid (with a different psychic prediction example) on page 34 of their 2023 book titled Nobody’s Fool: Why we get taken in and what we can do about it. They didn’t illustrate it, so I did, as is shown above. I got that that book from my friendly local public library and enjoyed reading it. The book is divided in two parts, each with four chapters (followed by a conclusion):
PART 1: HABITS
Chapter 1: Focus – Think about what’s missing.
Chapter 2: Prediction – Expect to be surprised.
Chapter 3: Commitment – Be careful when you assume.
Chapter 4: Efficiency – Ask more questions
PART 2: HOOKS
Chapter 5: Consistency – Appreciate the value of noise.
Chapter 6: Familiarity – Discount what you think you know.
Chapter 7: Precision – Take appropriate measures.
Chapter 8: Potency – Be wary of “butterfly effects.”
Pages 28 to 30 in Chapter 1 describe another example about what is missing. They also discussed it in an article at Nautilus on July 13, 2023 titled This WWII Story Made Us Better Thinkers.
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