Mental Model Posts ‘Natural Inference’

An Accelerated Master’s Degree: Statistics in a Book (or Two)

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Topics: Statistics
Statistics

Photo by jamesjustin

There have been plenty of books recently published on the concept of Deliberate Practice, which essentially says that it takes 10,000 hours of a certain kind of practice (called ‘deliberate’) to gain expertise in something.   It makes sense that the majority of what we want to learn in any discipline is going to be experiential (or gained through practice).  But in order to better understand our experiences, we want to have some kind of framework of what to expect.  We want to develop a theory structure.

Books are what give us this theory structure, and certainly the quality of the theory structure we begin with impacts the amount of deliberate practice we need to become an ‘expert.’  So it’s important to choose the right books, as they will provide the base infrastructure upon which we will layer our experiences.  We’re looking for books that concisely capture the overriding concepts of a particular discipline.

And in any discipline, at least one fairly well defined, there doesn’t need to be that many books to accomplish this.  I would generally say that 3 books or fewer, for each discipline, will give you a proper theory structure.

With that in mind, let’s look at Statistics…  Read More »

How to Understand Accounting: Translating Geek to English

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Topics: Accounting
Accounting Pic

Photo by Timm Suess

Accounting is needlessly complicated.  And there is often a huge communication barrier between the Accounting department and the rest of an organization.  Maybe that Intro to Accounting class was supposed to help you understand the difference between Debits and Credits, but in my experience, very few (if any) people actually retain this concept.

Debits and credits are part of Double-Entry Bookkeeping, which can trace its roots back to the ancient Greek mathematicians – it’s just a simple Algebraic equation.  But the concept was first codified and published by an Italian Friar named Luca Pacioli in 1494.  It seems pretty clear that Pacioli was using this system as a tool concerned mainly with who owed what to whom.  And there was clear benefit to this system.  Each transaction had to balance out (the debit side equaled the credit side); double-entry bookkeeping is one of those closed systems that must always be in balance.  It forced discipline, it forced transparency, and it forced honesty.  And while this system originally created great virtue effects, those effects are not quite so clear today.

So in order to understand Accounting, we first have to overcome the following aspects of it:  Read More »

Metrics: The Measurements that Control the Masses

Metrics

Photo by Stuck in Customs

We are being controlled.  Of our own free will of course, but nonetheless, our thinking is completely manipulated by society’s chosen metrics.  If society defines inflation as the CPI Index, everyone defines inflation that way.  If society defines growth as an increase in GDP, everyone defines growth that way.  We are all puppet’s to society’s metrics.  And if we try to escape it, who will understand what we’re talking about, anyway?

Of course, there are occasionally people who create their own metrics – people who take the time to figure out what drives the results they want to achieve – people who know the system isn’t quite right.  And those people are usually rewarded.  Read More »