Valuation Machines

Let’s talk about the human brain. Heavy stuff. I postulate that the primary purpose of the brain is to do one thing, valuation.

  • Is it more profitable to run or fight a predator?
  • Is it worth my time to talk to this person? Should I continue to breath and pump blood?
  • What is 1+1?
  • Is there value in swerving into oncoming traffic?

We challenge ourselves to games of valuation whenever we play a video game. We thrive or fail in our careers based on people’s beliefs in our ability to valuate complex financial matters. We listen to stories to compress complex ideas into digestible themes so we are better able to valuate new situations. We are valuation machines.

What is Math?

Mathematics is a language. It is the language of patterns. Patterns are utilized consciously and subconsciously to understand and predict our world. Some patterns are simple and repetitious - we can commit these to the underlying structures of the way we thing. Some are specialized - tied to fields of study in heuristic models we can eventually use for quick valuation. Some are complex and require us to commit thought and reference tables to utilize.

But math is the language we use to represent and understand those patterns. Whether in perfect information like chess or hidden information like poker, in all fields of study we are playing complex games of analysis and effort.

The Place of Story

From the moment breath leaves our throats or fingers hit keyboards we are purposely manipulating the patterns of other people’s brains. These new patterns can be woven to create beautiful prose of poetry, each line building upon the previous in a cascade of true wonder. They can be patterns that take very complex ideas and simplify them so they can be understood by key decision makers. They can be patterns that bias the consumer, presenting false information to skew believes and create friction.

As moth to flame, we are driven by story. In a world of complex information too dense to properly comprehend, we look to the patterns of story to relax and ease our mind. We look to it to make the world less heavy. We look to it to bypass needing to learn complex skills ourselves, opting instead to consumer summarized knowledge - to shortcut through mistakes and depth.

Patterns of Story and Science

People of science often take hard stances against art and story. The assumption that all choice should be based off of science is immature. Only half the equation. While anything that can be reasonably analyzed should be, at the highest levels of understanding of any topic math fails.

  • Most scientific literature, when re-tested by neutral parties, fails.
  • Most scientific studies are flawed. Well-meaning but flawed.
  • Almost all major business decisions are based off imperfect information.
  • Bias is everywhere - in the data and the person analyzing it.
  • We live in a world of incomplete information.

People of art and story similarly degrade the scientific experience. In business we speak of branding and communicate to investors in fiction about our successes and place in the market. And we say that you can’t measure emotion. All that is true but equally naive. We live in a time of unparalleled access to data. Anyone can do calculation on a spreadsheet, learn to program, and scientifically review nearly any aspect of business.

If you want to be at the highest level of any field, you need to incorporate both sides of life. You need to tell amazing stories, love numbers, and...hopefully...be human about the flaws in both.