Book I’m Reading: Numbersense
[I have a bad cold so I'm going to keep this really short but I had to talk a bit about this book.]
Numbersense by Kaiser Fung is a really great book. I had to check a few times but the title is one word.
The stories he tells about numbers and analysis are riveting. I did a quick skim through and the stories I especially liked were the financial analysis of Groupon’s sales pitch and the explanation about economic data – the jobs figure and the inflation figure.
The Groupon’s analysis is especially interesting because he discusses how you should approach analyzing the sales impact of utilizing Groupon deals versus not using the Groupon deals. It’s very illustrative of what we finance folks should be on the lookout for. He has a term called “counterfactual” and it appears to be very close to the “opportunity cost” if not it.
The chapter on the Jobs figure was illustrative because Kaiser Fung explains very convincingly (okay, I was already convinced) why trending data will sometimes be more beneficial rather than raw data.
And the section on the CPI inflation number was an interesting reason on why the inflation rate may not appear to coincide with what we personally see around us.
Apparently Kaiser Fung has written a book entitled Numbers Rule Your World. I can’t believe I missed this one. The only possible explanation for missing this is that it came out around 2010 and I might have still been reading all the finance books on how we got to the 2008 crash.
Anyway, I have to get that book.