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A little more perspective, a little more understanding
Numbers appear to give precision, but they are often meaningless without a suitable context
“It never rains in Southern California”, the song by Albert Hammond goes. This is untrue — the average annual rainfall over the period between 1877 and 2018 was over 14 inches (37 cm). But as far as I know, nobody ever challenged Mr Hammond about this false claim.
We humans are more used to communicating with words than with numbers. When we want to express how likely we think something is or will be for instance, chances are we don’t use percentages (excepting, perhaps, 100%), but we use words. Always, never, possibly, usually, more often than not, almost certainly — just a small sample of our probabilistic vocabulary.
Inevitably that means there is lack of precision involved, often a bit of hyperbole (as in the song), and even a risk of misinterpretation. A probability of 25% is the same to everyone, but is that also true for our human-language terms?
This is something that Michael Mauboussin, an adjunct professor of finance at Columbia Business School and…
