Definitions

Non Transistive

The childhood game of Rock, Paper, Scissors is a simple example of a nontransitive rule. Rock beats (breaks) Scissors, Scissors beats (cuts) Paper, and Paper beats (covers) Rock.

Probability

The danger is that by extending probability to everything, it is easy to be seduced into thinking that one tool—calculating probabilities—is sufficient for dealing with all kinds of uncertainty. As a consequence, other important tools, such as rules of thumb, are left in the cupboard.

Invisible histories

Invisible histories have a scientific name, alternative sample paths, a name borrowed from the field of mathematics of probability called stochastic processes. The notion of path, as opposed to outcome, indicates that it is not a mere MBA-style scenario analysis, but the examination of a sequence of scenarios along the course of time. We are not just concerned with where a bird can end up tomorrow night, but rather with all the various places it can possibly visit during the time interval. We are not concerned with what the investor’s worth would be in, say, a year, but rather of the heart-wrenching rides he may experience during that period.