Starting from zero · Course 9 of 11 · Stage 2
Probability for investors
Expected value, conditional probability, Bayes by hand and base rates, worked on the real flag rates this product computes across the US market.
Scenarios, base rates, forensic scores and every claim about what usually happens are probability statements. The academy has used them in four scattered lessons and never taught them as a subject. This is that course.
Eight lessons. The first two are about stating a probability you can be held to and computing what it is worth. The third measures dependence between two real screening tests instead of assuming it away. The fourth and fifth work the false-positive problem with the flag rate this product's own forensic score produces across the US market, and then update a belief with it by hand.
The last three are about shapes: which distribution a claim quietly assumes, what one enormous outcome does to an average, and how to start from the reference class before looking at the specific case.
Where a figure describes the market it was read from this product's own data, with the date and the cohort size printed beside it. Where it is arithmetic it is round and recomputable. No lesson here forecasts anything.
The tools, not the work
Probability for investors is 8 lessons on the arithmetic and the rules an investor has to be able to handle: the discounting, the probability, the standards, the tax. They are what you work WITH. None of them is work done on a company you own, and a tool understood is not a book checked.
Related
- Base rates and the outside view is the judgement failure this course supplies the arithmetic for, and the place to read next.
- What a fitted score was fitted on shows what a fitted score carries from its own sample, which is the setting lessons four and five work in.
- Retro-test a condition runs a stated condition against a company's own filed years, which is the discipline this course is about.
See our methodology for how the product reads a filing and what it refuses to compute.