“In finance this point is made with the quip that more fiction has been written in Excel than in Word. None of this is bad. I think it’s just realistic, and it means all of us should keep a few things in mind. 1. A fact multiplied by a story always equals something less than a fact. So almost all predictions have less than a 100% chance of coming true. That’s not a bold statement, but if you embrace it it always pushes you towards room for error and the ability to endure surprise. 2. The most persuasive stories are what you want to believe are true or are an extension of what you’ve experienced firsthand, which is what makes forecasting so hard. 3. If you’re trying to figure out where something is going next, you have to understand more than its technical possibilities. You have to understand the stories everyone tells themselves about those possibilities, because it’s such a big part of the forecasting equation. 4. When interest rates are low, the story side of the equation becomes more powerful. When short-term results aren’t competing for attention with interest rates, most of a company’s valuation comes from what it might be able to achieve in the future. That, of course, is just a story. And people can come up with some wild stories.” https://lnkd.in/ey7AGyhu