Episode-1158- Matthew Millar on How to Measure Preparedness or Anything for that Matter — 63 Comments

  1. This entire framework and viewpoint is classic intelligence analysis. Reducing uncertainty on the battlefield so that somebody may make decisions. This goes way beyond just enemy, anything that may impede the the mission. The biggest example is weather. Loaded with uncertainty that is critically important.

    • I feel very confidently in saying my time as a Marine Corps intel guy has prepared me for the real world and exactly this way of thinking. Reduce uncertainty, break it down and brainstorm it, make appropriate decisions based off what you can do.

      Too many people focus on stuff they absolutely can not change, at the expense of looking at what they can do. Once you break a situation apart and see, (remove some uncertainty) these are the areas I can’t do anything about, and move on with what you can.

  2. great episode, interesting concepts… but being from the Pacific Northwest, I would love it if you could tell me the value of a slug! 😉 I’ve been asking that one for decades!

    • Yes! Value of the slug depends on who you ask. I always try to ask “what are the observable consequences for this variable.” For a gardener, the observable consequences are often lost plants or time spent foiling the slugs instead of other activities and so the value would be negative as Jack said; but then once jack gets his ponds and his ducks maybe the value will switch to positive because he’ll get eggs while lowering his duck feed costs.

      But the general rule to ask is “what are the observable consequences if you saw less of ____ or more of ____.”

  3. Super Interesting. Thanks Jack for having Matthew on the show today. I’d like to learn more on this, 14 skills in 2014?

  4. I wanted to ask about the cost of contributing to a 401k vs spending money on systems to provide your needs. But I realize this may be too broad of a scenario as there are many different ways you could invest your money. But any thoughts with a broad generalization.

    • This is a great one; our first step is to clearly define the decision and the words we use like “systems to provide for your needs.” Be specific about what the trade-off is – what could you buy with the money that would otherwise be in the 401K. Also, is the decision “contribute nothing to 401 K vs. some amount like 5%” or is the decision “take money out of 401K and suffer penalty vs. leave it in.”
      The second step is defining where most of your uncertainties are – are they in the benefits of the 401K or the benefits of the systems to provide your needs. You also might have uncertainties about the costs of the systems – cost of 401K is pretty clear (just the money you put in right?) Cost of systems is more uncertain cuz things can break down and you might not know how much time it will take to do things etc.
      Third step is to start listing variables in the system and tying into a benefits analysis. 90% of the time we do our benefits analysis as a cash-equivalent …meaning we always translate a benefit like “good health” into a dollar amount. That can be a tricky step, but its FUN:) This is also the step where information value comes into play – we use ranges for any variable where we are uncertain, and then we can calculate the information value – you would probably need a hand with that unless it is something you have done before. The advantage is that you can then zero in on where your uncertainty is highest and take steps to reduce it.

  5. Another thought provoking episode. Thank you for your time Matthew, and welcome back to Texas Jack and Dorothy.

  6. Stop the analogy of the useless transistor radio in the Faraday cage. Granted, the probability of a significant emp is small, but the consequences are large. We spent a few dollars (less than 5) on spare electrical components for our chainsaw. We store them in a (Faraday equivalent) metal cabinet. Without the chainsaw, we don’t have firewood; without firewood, it’s too COLD. We have enough two-cycle oil and gasoline from various vehicles to get us through at least one winter. Not all situations are alike. And this is a CHEAP prep.

    • Sounds like a great common-sense solution. Also, my view (Matt’s) is that a CME that would affect our grid is one of the MORE likely events among the SHTF scenarios I’ve heard. A war with China being the other. As I said on the show we have enough data to say that there is a 1/30 to 1/300 chance of a significant CME event every year. I think as Jack mentioned you then have to multiply that by the chance it would actually take out the grid which is maybe 40%. So my estimate is 0.1% to 1% chance of something that is pretty SHTFish. I think the point Jack is trying to make though is – if you focus on general prep you should be better off in a whole range of survival situations.
      Cheap and easy preps that could have a huge effect on a possible scenario seem like a good idea and place for focus though. Sounds like you’ve done that.

    • If an EMP as large as would be necessary for a wholesale take out of the gird occurs that little cage you made won’t do jack diddly to protect your parts. Believe it will if you wish but frankly as I keep saying just because the internet tells you something doesn’t make it true.

      The mythology around EMP protection is excessive to the extreme. People just don’t get it, I have done the research and spoken to enough experts to know the truth. The type of event that would actually take down the grid would fry your electronics if they were 12 feet under the dirt.

      • Which is why you should have a vacume tube radio. EMP proof technology. During the cold war Soviet avionics were miniature vacume tube based … also the reason that new vacume tube replacement is available from old eastern block countries.

    • Interesting. I guess I would defer to Jack in terms of knowledge of the effectiveness of something like a metal cabinet. There does seem to be some disagreement about the effect of a CME on grid versus individual electronics though. My understanding was that a CME creates a large magnetic pulse which is big enough to turn any large conductor into an inductor. Large power transformers and the grid itself are conductors so a CME creates a flow of electricity which fries the grid but would leave individual electronics more or less OK. Personally I’d still defer to Jack on this though since I am not an expert in this area. Any physicists out there want to weigh in?

  7. One wife, 4 daughters, female dog. One bathroom.
    shower clogged. Do I get a shotgun or a plumber?

  8. Thanks everyone for your kind comments! It’s kind of hilarious how much we spent talking about CMEs – maybe Steve Harris is right that CMEs/EMPs are a roach motel – you can check in any time you want but you can’t never leave!

  9. Matthew has given some great suggestions for deciding what directions to go for our preps. Great show Jack

  10. Jack, thanks for having Mr. Millar on. I appreciate his perspective and experience on risk assessment. I think we can really benefit from a more rigorous, quantifiable approach to assessment than might commonly be used in professional settings and in our own lives.

    I second Emill’s suggestion that this would be a good skill set to revisit in 2014.

  11. thank you for this show, love listening to you two, talk about all of these topics. it gives me much to think about, in my day to day prepping, it is good to know we have intelingent life form here in wisconsin,thanks ……

  12. EMP/CME is something people can worry about if they want, but every other prep will help that situation, so take care of those first. A properly constructed faraday cage would protect against a true CME because it has nothing to do with how far underground they are it has to do with how much current they can dissipate. Have you ever seen the guy with the faraday suit of chainmail like stuff that can withstand being struck by the equivalent of lightning?

      • Hey Jack,
        Not to be antagonistic, but there is a standard calculation for measuring the effectiveness of a Faraday Cage. While most of the inter-web DIY versions are crap, IF a person wanted a working Faraday Cage that would successfully protect the contents then you would need at least 125Db of attenuation and the construction (openings/closings and shape) would have to be up to the minimum Mil Spec.
        My co-host, “The Engineer” (RevolutionFanCast podcast) has designed a cage, not just for the standard Mil Spec but went even further since technology and research suggests what we know about Mil Spec is most likely way behind what the power of a specifically designed HEMP weapon could produce today – somewhere in the neighborhood of 200,000 Volts/Meter. This would be on the scale of a “Super EMP” that some scientists say Russia and China have been working on.

        Although the math to design is available and he has most likely over-engineered his version, he has learned that you may already have a valid working Faraday Cage in your home: The All American Canner – pressure canner – the style that has metal -to-metal lid that has the wing nut crank type enclosures. The lid would need to be modified by removing the gauges and filling the holes to spec.

        Why would you want anything electronic if afterward the grid will be down?

        Ipad/PDA/small laptop with solar charger – loaded with every episode of TSP podcasts ;>), 40 years of Mother Earth News articles, every e-book on survival, gardening, edible plants, defense etc (you get the picture)
        Probably pair of handheld radios w/batteries that can be charged by solar. If you have a pre-1984 vehicle, the few parts that may be needed to start and run a vehicle.

        Now that we know it is possible, then we would have to determine if we spring for the approximately $350 for the All American Canner plus the cost of the contents… or WHEN this should be added as you build up your preps.

        Here is a link to an image of the canner:
        This is NOT an affiliate link.

    • So, you’re saying faraday cages don’t work like every single science textbook says they do?

  13. Interesting topic, good show as always.
    I can’t read so put me down for the webinar hehehe…

    I can’t come up with a stumper right now it’s hot and I’m tired, so I’ll just let it be.


  14. The first half of the episode was a little hard to follow but I’m glad I hung in there. It was pretty interesting. I think there should be a formula for preps similar to the Drake Equation. Each disaster can be assigned a probability and then crank out what we should do in response overall.

  15. I’m gonna have to listen to this one again but I think I could use some of these principles at work, and also when deciding between choosing a cigar for my mental health or working out for my physical health 😀

  16. Interesting episode. Entering contest. Does Matthew have any contact info? I’d like to discuss something with him.

  17. This was an eye opener to say the least..Ok one in a million just took on a new meaning to me, I used to think of it as the longest of long shots, but, after him saying, “you have a one in a million chance of dying every day” made me think about how those odds seem so huge but in the grand scheme of things they aren’t as huge as one may think…

  18. I wonder how to evaluate virtues? I can see trustworthiness being a basis for economic transactions, but what about ‘unconditional positive regard’ (a.k.a. love)? Courage? Faith?

    Great show! I love the concept of calibrating and would definitely like to enter the contest.

    • Those are classic examples/questions of a so-called “in-tangible.” I think what you are asking is what is the value of something like “faith.” It is easier to demonstrate it through a discussion rather than a post like this – but the question I would ask would be “how would you know if you saw faith, or someone with faith?” “What are some of the things you might observe or the consequences that may be more or less likely if someone had or did not have faith?” Usually, when somebody asks about faith or love, they are thinking in their mind of something they felt, saw, or observed in some way in the past that they called “faith” or “love.” Once we can get some observations, than those things can usually be easily measured. Measurements of the value of these things can be quite astronomical, BTW.

      There is also a valid argument (IMO) that you are only measuring part of the value of these things though since they might be valuable in some measure because of things that we aren’t consciously aware of – if we aren’t aware of the observable consequence for why we value something than it becomes more difficult to measure.

  19. Like some have said before me, I’m glad I kept listening… I consider myself an analytical person, but at first I even thought this was way too much thought into some things, but as always, it becomes a worthy and interesting topic. Good show.

  20. Also, Jack had a series on ‘”5 Minutes with Jack” regarding 8 forms of capital. It seems like an interesting synthesis to look at decisions using the techniques in this podcast and the concepts and valuations in those other forms of capital.

  21. One of the best episodes I have heard.
    I love anything that pushs me to analise facts for myself rather than swallow the ones available. Higher learning is what puts us above the animals after all.

  22. Matthew,
    Since you are a prepper too, I wonder if you have a personal example of a calculation you have done to get the answer using your model?

    Interesting show. This model reninds me of a “internal rate of return” calculation.

    • Hi sure.
      I used it to calculate whether we should buy a new fridge recently. When our current fridge is running it sounds like it is cleared for take off and it was probably made during the Eisenhower administration. We knew old models of fridges burned lots of electricity and so knew getting a new fridge would create an energy savings for us.
      It was a pretty simple model – factored in things like uncertainty in cost of the new fridge, subsidies for energy efficient appliances, electricity savings, decreased chance of break down, and increased utility from not hearing a NASA space launch in our kitchen in the middle of the night.

      Well, it turned out that there was a very clear benefit to NOT getting a new fridge, which was quite a surprise to me. Not only that, it was so clearly the case, that no variables came back with information value so there was no need to think about it further.

      The fridge example is one where it probably wasn’t worth the effort of creating a model but the result was still surprising and helpful. A simple cost/benefit analysis would have sufficed for the fridge though.

      We’re currently deciding between whether it would be better to buy a truck, a tractor, or an end-loader given our needs so that’s something that would be more worthwhile of building a model (a $3,000-$5,000 decision).

      And yes, we always include an Internal Rate of Return as one of the outputs of the model. I didn’t go into this much on the show, but we actually create a distribution of Net Present Values and Internal Rates of Return by running a few thousand simulations (the so-called Monte Carlo)…so we know the range of possibilities that have a reasonable chance of occurrence.

      • I am familiar with the Monte Carlo when measuring investiment strategies. AT&T used some of this when they borrowered stategies from the mob when the mob was frontrunning info from the race track to far flung bookies and were able to put in a fix.
        There is also a poignant concept of Positive Expectation which is based in Kelly’s Criterion. Not sure how this can be applied to prepping

        This is a fascinating book: Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

      • So, on the fridge example – how is it there was “no info value” coming back?And how did this cause you to NOT purchase a new fridge?

        I can only guess tha if you take out the NASA Launch factor then maybe since (even with high electricity usage) the existing fridge is still cost effective since it runs and the payback for the cap cost of a new fridge is still “too long?” Am I close?

        • re: fridge…I could have been more clear – the reason it had no information value was because it was a slam dunk NOT to buy the fridge. Information value only occurs if there is a risk of being wrong – and in this case one choice was so much clearly the superior choice that the chance of ebing wrong was very small. It sounds like you would like Doug’s book 🙂

  23. Interesting show. I will have to listen several times. I am not a mathematician but can see the need for this type of analysis.

    My quandary is I get off into the weeds too easy and can’t keep my mind focused enough to do a complete analysis. I like to think that I am a global thinker, not riddled with ADD!

    Kind of like surfing for several hours and following links; then the browser crashes. How did I get there?

    I need a model to use to help develop the calculation. Maybe the book has one.