Fuzzy Or Garbled

by Rick Nason, PhD, CFA

Partner, RSD Solutions Inc.

www.rsdsolutions.com

info@rsdsolutions.com

Just finished reading an older (1997) book called “The Universe and the Teacup” by K.C. Cole.  She made an interesting point in this very readable and entertaining mathematics book about how “fuzzy logic is associated with garbled thinking”.  Fuzzy logic of course is a branch of mathematics that does not subscribe to the normal black and white thinking that we have commonly come to associate with mathematics.  Fuzzy logic, which has many wide-spread practical applications, basically asserts that while some answers and measurements are more correct than others, there is not an absolute value or answer to some questions and equations.

The interesting thing about this is that when you think about it, most of your daily actions are based on fuzzy thinking.  How did you decide what to have for breakfast this morning?  How did you decide what e-mail you would open up first?  When asked by a colleague how your day was going, how did you decide to respond?

Fuzzy logic is not garbled thinking.  Fuzzy logic is reality.  Perhaps it is our insistence in risk management on strict black and white absolute value thinking that is garbled.