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Oroville Dam Spillway Incident Report


The Oroville Dam Spillway Incident Report became public in January 2018. The story it tells is remarkably similar to the one we assumed, based on publicly available information in the aftermath of the accident. As risk advisers and managers we discuss below the various statements in the Oroville Dam Spillway Incident Report. We aim at highlighting risk biases and potential management changes to avoid similar developments. Oroville Dam Spillway Incident Report Conclusions Commented The Independent Forensic Team Report made a number…

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What is the validity of your risk forecast?


When talking to potential customers we oftentimes hear “ What is the validity of your risk forecast? ” What they mean is actually “how precise” our numbers are. That type of questions generally comes from individuals that confuse risk assessment with divinatory arts. They do not recognize that performing a risk assessment is completely different than reading a crystal ball. Another common objection comes from people that claim that no one can evaluate probabilities of events because of complexities, etc.…

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Acting intuitively or planning with a 360 view of upward and downward tactical and strategic risks


The ever present conflict between Acting intuitively or planning with a 360 view of upward and downward tactical and strategic risks. We know it exists, we can see it, we know when others fall for ill guided intuition. Yet we often do it. There is a growing bias towards action in our society. We glorify action, when successful. Blunders, if they happen to others, quickly forgotten. Action often reigns in projects, startups. Excitement of the “new” works as a dope…

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Risk Management in Trading


We thank Alexander Nixon for writing this post on Risk Management in Trading Risk Management in Trading Risk management is a necessary but often overlooked requirement to successful trading. The usual scenario is that traders prioritize finding accurate entry signals before learning the basics of risk management. However, this leads to financial failure. Investopedia reports that an estimated failure rate of 90% happens when trading. Business insider documented that 4 out of 5 day traders around the world lose money. Only 1 in 100…

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similarities between psychology and risk assessments


The ability to distinguish between different terms is a prerequisite for the acquisition of accurate knowledge, including loss prevention knowledge. Without this capacity, confusion is virtually inevitable. More generally, several words and concepts in loss prevention underscore the necessity of acquiring a specialist vocabulary making fine differentiation among seemingly related but conceptually distinct concepts. As you probably noted the paragraph above is not our writing style. As a matter of fact we only have slightly adapted the conclusion of a…

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Opportunity, experience, learning from mistakes and regrets


Opportunity, experience, learning from mistakes and regrets come up in many conversations. Examples generally start with a IF: I had known what I know now. It would be possible to start over again. A second chance would be possible. It seems like we really firmly believe we can learn from prior mistakes. We can absorb lesson learned and profit from them. However, there is abundant evidence that is not the case. We tend to repeat patterns, even if we know they…

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Unrealistic risk assessment describing a rosy scenario


Keystone pipeline has spilled substantially more oil, and more often, than indicated in the risk assessments the company provided to regulators. But why and how a common risk assessment becomes an unrealistic risk assessment describing a rosy scenario? Indeed what regulators saw in the pre-construction project risk assessment was reportedly the following. “A spill of more than 50 barrels will occur “ not more than once every seven to 11 years over the entire length of the pipeline in the…

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