Narrative and Numbers Quotes

“I am naturally drawn to numbers but one of the ironies of working with numbers is that the more I work with them, the more skeptical I become about purely number-driven arguments.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“Greek theater, every story needs a beginning, a middle, and an end, and what keeps a story going is that the incidents within the story are linked together by cause and effect. For the story to have an effect, the protagonist should see a change in fortune over the course of the story. It is amazing how well that structure has held up through time.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“As I see it, the future of investing belongs to those who are flexible in their thinking and capable of moving easily from one segment of the market to another.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“we are increasingly using the Internet as an external hard drive for our memories.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“valuation that is not backed up by a story is both soulless and untrustworthy and that we remember stories better than spreadsheets.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“Kahneman notes in his book on investor psychology, experience is not a very good teacher in investing and markets. 2 As human beings, we often extract the wrong lessons from past successes, don’t learn enough from our failures, and sometimes delude ourselves into remembering things that never happened.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“With all of the data and analytical tools at our disposal, you would not expect this, but a substantial proportion of business and investment decisions are still based on the average. I see investors and analysts contending that a stock is cheap because it trades at a PE that is lower than the sector average or that a company has too much debt because its debt ratio is higher than the average for the market. The average is not only a poor central measure on which to focus in distributions that are not symmetric, but it strikes me as a waste to not use the rest of the data.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“in the hands of a skilled number cruncher, this bias can be hidden far better with numbers than with stories.”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business

“We relate to and remember stories better than we do numbers, but storytelling can lead us into fantasyland quickly,”
― Aswath Damodaran, Narrative and Numbers: The Value of Stories in Business