Professor Hand’s session, ‘The improbability principle – why coincidences, miracles and rare events happen every day’ will run from 4pm to 4.45pm on 3 October, the first day of the CISI Financial Planning Conference. The professor agreed to provide some insights to this fascinating topic in advance of the Conference.
What makes an improbable event likely to happen almost every day?
There are five natural laws which cause this, and together they constitute the improbability principle. One is ‘the law of inevitability’. This says that it is certain – that is, inevitable – that one of the set of all possible outcomes will occur. For example, I have some icosahedral dice in my collection – dice with 20 faces. While it’s improbable that any one particular face will come up (the chance is only one in 20), it’s certain that one of those improbable events will happen: one of the 20 faces must come up.
Another law is ‘the law of truly large numbers’. This says that any event, no matter how improbable, is almost certain to happen if you give it enough opportunities. Put another way, if something has a one in a million chance of happening, but you give it a million opportunities, you should not be surprised if it happens. The chance of any particular person dying in a car crash today is very small, but there are seven billion people in the world, so it is almost certain that some will be killed in car crashes today.
The other three laws are ‘the law of selection’, ‘the law of the probability lever’, and ‘the law of near enough’. Any of the laws by themselves lead to improbable events occurring: people winning lotteries twice, having miraculous escapes from accidents, and so on. But when the laws work together, even more incredible things happen. All of these laws, and true stories illustrating them, are described in my book The improbability principle: why coincidences, miracles, and rare events happen every day.
Has anything improbable happened to you today?
I’m writing this early in the morning, so there hasn’t yet been much opportunity for the improbability principle to work its magic. But a week or so ago I was writing an article about measurement, which is the topic of my latest book. I wanted to contrast physical and psychological measurement, and I used the measurement of temperature, using a thermometer, with the measurement of pain, using a dolorimeter, as contrasting examples. The next day, the word ‘dolorimeter’ was the subject of the first question of The Times’s daily quiz. Not a word I run into every day – indeed I don’t think I’ve ever used it before – so I think this counts as an improbable event.
What would you class as a miracle in statistical terms?
A miracle is defined as an event which cannot be explained by natural laws. Of course, there is no such thing. It’s merely that sometimes events seem so very unlikely that they appear to defy natural explanation. But this is wrong, and the laws of the improbability principle can explain them.
What was the research that got you so interested in the probability of rare events happening every day?
As a statistician, I spend my life thinking about probability and chance: how to measure it, how to model it, how to control it, and how to predict it. I was also fascinated by the often counterintuitive nature of chance. Sometimes things seem unbelievable, and it is only when you dig down into the mathematics that you get a real grasp of the way things are. So there was no particular piece of research; chance and probability are the backdrop of my life.
Many people are maths phobic. Although you’d think that most of your audience at the annual Financial Planning Conference shouldn’t be, how will you explain complex theories in simple terms?
This is unfortunate, and I think it’s largely due to poor teaching when they are young. Indeed I have encountered primary school teachers who say things like “I can’t understand mathematics”. With that perspective, it’s difficult to see how they’ll be able to persuade their pupils that mathematics is exciting and creative, and leads to a solid understanding of the world around them.
The trick to explaining complex theories in simple terms is to start with examples that your audience will have encountered in their lives. This engages people, so that they can see the insight that applying even elementary mathematical concepts can yield.
What do you think is the most interesting thing happening in the world today?
I think it’s impossible to single out one thing! There’s so much going on. In the world of statistics, the sudden huge growth in awareness of the potential of data science is particularly encouraging: people have, at last, grasped the point that statistics is the most exciting of disciplines. Elsewhere there are amazing medical advances, scientific breakthroughs, and technological developments. I do think the rate of change is getting faster and faster. The world just ten years from now will be different in many ways from the world of today. I’m hoping that my next car will be driverless.
About the Conference
The CISI Financial Planning Conference will take place on 3–5 October at the Celtic Manor Resort Hotel, Newport, Wales. This is a 'must attend' event for many CISI financial planning members and Accredited Financial Planning FirmsTM. It provides opportunities for personal and business development, quality structured CPD, the sharing of best practice, catching up with friends and making new connections.
To view the full programme and speaker line-up, visit cisi.org/fp16 where you can book your place, along with any specific sessions that you would like to attend.
Book before 20 August 2016 to take advantage of the early bird discount.
We look forward to welcoming our new members from the financial planning community to the conference, as well as our existing members from wealth management functions and firms.