Posts filed under “Mathematics”

Bad Maths

We live in an era of technological advancement. Whether it’s genomics, nanotechnology or software algorithms, the world is driven by mathematical solutions to complex problems.

Yet at the same time, we are surrounded by what I like to call Bad Math. It seems as if the average person has little familiarity with the fundamental workings of mathematics. Statistical errors are rife. Even the classic error of confusing correlation with causation seems to be impossible to vanquish.

Some of the blame for this lays in our education system. We teach by rote, instead of explaining critical reasoning and analysis. Instead of teaching children what to think, we should be teaching them how to think. It is a fundamental failure of our education system.

Which brings us to today’s subject.

As you might imagine from a review of any of our morning reads, I plow through a lot of media, much of it good, some of it excellent. What you don’t see linked are the poorly reasoned, statistically amateurish, logically defective articles that don’t make the cut. Too many writers seem to have a dominant right hemisphere. While that may be great for creativity and language skills, it means they are deficient in logic, numbers and analysis.

Perhaps a few examples might help to explain my ire.

 

Continues here

 

 

 

Category: Bad Math, Really, really bad calls

Zombie Ideas? Blame the Billionaires…

  “We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes.” -Ned Davis   I began my career in finance on a trading desk. You learn some things very early on in that sort of…Read More

Category: Bad Math, Philosophy, Politics, Really, really bad calls, Regulation

Wherein I Correct Nobel Laureate Daniel Kahneman’s Math

I am a fan of Morgan Housel, columnist at the Motley Fool. His writings evince a strong understanding of behavioral issues, and he has a gift of sifting through the nonsense to get to what really matters. Only on rare occasions do I get to disagree with him. Today is one of those times. Housel has…Read More

Category: Bad Math, Psychology

Got Math? Odds Are, You Don’t Understand Probabilities

Last week, we discussed the problems with having poor reading comprehension and the impact that has on consuming news. This week, I want to look at the lack of math skills. America seems to becoming a dangerously innumerate society. Innumeracy is incompetence with numbers rather than words. This is a worrisome issue for the future…Read More

Category: Apprenticed Investor, Bad Math, Data Analysis, Really, really bad calls

Why the American economy grows faster under Democrats

Another classic correlation versus causation issue:

Autoplay video after the jump

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Category: Bad Math, Video

Inflation Was Much Higher Pre-Crisis than Post-Crisis

click for ginormous chart Source: FRED     This morning’s column on Inflation truthers led to some emailers insisting inflation numbers are much higher post crisis than pre. Sorry, but the data says that is simply not true. Play with the attached FRED XL spread sheets all you want, the data is hard to argue…Read More

Category: Data Analysis, Inflation, Mathematics

What the World Cup Tells Us About Investing Models

  “All models are wrong; some are useful.” – George E. P. Box   The quote above comes from George Box. He was a brilliant statistician and professor, who thought long and hard about the use and misuse of statistics. I was reminded of Box this weekend while watching the thrilling World Cup final between…Read More

Category: Investing, Mathematics, Sports

Math Is The Ultimate Bull$*&t Detector

 

 

Chances are that when you think about math—which, for most of us, happens pretty infrequently—you don’t think of it in anything like the way that Jordan Ellenberg does. Ellenberg is a rare scholar who is both a math professor (at the University of Wisconsin-Madison) and a novelist. And in his fascinating new book, How Not to Be Wrong: The Power of Mathematical Thinking, he deploys analyses of poetry, politics, and even religion in a bold recasting of what math is in the first place.

For Ellenberg, the stuff you hated about math in high school isn’t the core of the thing. He’s emphatic that mathematics isn’t simply about the calculations involving, you know, numbers; rather, it’s a highly nuanced approach to solving problems that we all, unavoidably, encounter. Ellenberg’s chapters range from showing how mathematical thinking undermines many popular proofs for the existence of God (Paley’s design argument, Pascal’s wager), to explaining how math helps us understand why smoking causes lung cancer (contrary to claims by one early statistician who actually argued that the causation might be reversed—that lung cancer might cause smoking!).

On the show this week we talked to Ellenberg about his book, and math: why you’re probably thinking about it all wrong, and why it’s so powerful.

This episode also features a short interview with Tasneem Raja, author of the must-read new article “We Can Code It: Why computer literacy is key to winning the 21st century” in Mother Jones, and a discussion of new findings about autism and possibly how to stop it—by making brain cells better able to communicate with one another.

Category: Mathematics, Video

Six Ways to Separate Lies From Statistics

From Betsey Stevenson & Justin Wolfers, a short primer on separating lies from statistics:   1. Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion. Do the same patterns repeat in many data sets, in different countries, industries or eras? 2. Results that…Read More

Category: Bad Math, Data Analysis, UnScience

Model Risk of Risk Models

Category: Credit, Mathematics, Think Tank