Tag Archives: Math

Math and empathy

Last weekend, I wrote about how studying math helps us identify patterns which are an important contributor to successful investing.

As Roger Antonsen, a mathematician at the University of Oslo, puts forth in this TED talk, the study of math also helps us realize that the same pattern can be expressed in different ways. So, depending on the perspective you take, the same pattern can also be understood in different ways.

If this is the case, then to truly understand something, we need to be able to see it from different perspectives. And seeing something from a different perspective that belongs to someone else is empathy. In other words, to truly understand something, we need to be able to empathize.

I couldn’t embed the video in this post, but you canĀ watch it in full at this link.

Math, pattern recognition, and investing

Pattern recognition is essential to successful investing. Identifying which data points carry signal, which are noise, and assigning weights based on the predictive powers of those that carry signal while building a diversified portfolio that allows for the overall portfolio to succeed even if individual investments fail due to the incompleteness and incorrect assessments in your data set sit at the heart of investing.

And math is arguably the best subject to study if you want to develop your pattern recognition skills. Math is all about identifying patterns that link inputs to outputs. A mathematical equation is simply a pattern expressed in written form.

I think that a big part of why I enjoy investing is because of the underlying math and pattern recognition skills it involves.