The Idea Dude


Thursday, February 25, 2010

The beauty of human logic

A couple of weeks ago, my Macbook hard drive crash (the second in two years). The previous 20+ years and numerous computers never had an issue. Like they said in the investment ads, past performance is no indicator or guarantee of future performance.

Another colleague in the office had a hard disk crash this week. Searching in the forums for the best RAID strategy. For the small business owner, it's not the RAID with striping or fancy over the network. All he really needed was a disk controller with RAID and mirror a drive. Cost would have been $200. He is still down after 3 days trying to get his backup from his off-site backup.

The forums are full of comments like, "I don't think you need to mirror or backup your hard disk because I've been running Windows Vista for 8 months and nothing has happened". Yes, disk drives have very large MTBFs (mean time between failures), but like flying an airplane, disasters don't happen often but when it happens, it is catastrophic.

I'm not sure why we have this logic built in, but it pervades out thinking, whether it is buying insurance, investing in stock markets or backing up our data. Past performance is no guarantee of future performance.

We simply don't know how to assess risk. Which one is worse? the fact that your book falls off the table once a day and you have to pick it up or the fact that you have Ming Vase put high up on a cupboard and you live in San Francisco. You can live with the knowledge your book may look worse for wear over a year but you are less likely to survive your expensive Ming Vase falling down due to earth tremor in 5 years time. We are also more likely to fix the table or put the book somewhere else because it annoys us than insure that Ming Vase because it has never fallen over in the last 10 years.

The beauty of human logic.


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