Wednesday, November 13, 2013

Current Rereading

A very entertaining and instructive book.

The author presented evidence suggesting that humans intuitively think about number series in a logarithmic manner rather than in a linear manner, and that the human brain is more adept in dealing with ratios and relative sizes, and is much slower in grasping absolute numbers, especially with large numbers.  These have interesting ramifications for long term investing, especially when market participants attempt to discount a series of cashflow way out in the future.

I will update with further insights as I slowly wend my way across Alex's Numberland.