Michael Covel talks with Dylan Evans. Evans is a British academic and author. The one subject that really caught Covel’s eye is the idea of “risk intelligence” (see his TED video which is great): expected value, bet sizing, certainty, and process vs. outcome. Evans does a fantastic job of getting at these issues (critical to traders and just about anyone else), and these are the critical issues not only to trading but to life. Covel and Evans discuss expected value, the definition of risk intelligence; optimism bias; correlations between IQ and risk intelligence; the Brandywine Raceway in Delaware and unconscious statistical modeling; probabilities and the nuclear power risk issue; making decisions on uncertain information; the expected value mindset; bet sizing; how luck is always part of the game; knowing when not to bet; the hidden costs of trying to eliminate risk in a system where risk can never be eliminated; and the “calibration test” for risk intelligence. Dylan Evans can be found at projectionpoint.com.