Finance is overwhelmingly taught as a math-based field, where you put data into a formula and the formula tells you what to do, and it’s assumed that you’ll just go do it. This is true in personal finance, where you’re told to have a six-month emergency fund and save 10% of your salary. It’s true in investing, where we know the exact historical correlations between interest rates and valuations. And it’s true in corporate finance, where CFOs can measure the precise cost of capital. It’s not that any of these things are bad or wrong. It’s that knowing what to do tells you nothing about what
...more
