“Looking into it a bit, Jamie found that the model used by Wall Street to price LEAPs, the Black-Scholes option pricing model, made some strange assumptions.” MadeUsedFoundBitsBlackStreetsStrangeWallModelsAssumptionLeapJamieScholesPricing Book:The Big Short: Inside the Doomsday Machine (movie tie-in) Source: The Big Short: Inside the Doomsday Machine (movie tie-in)
“People do make assumptions about models. That's their issue, not mine. It doesn't bother me because I'm comfortable enough in my own skin - I know who I am.” PeopleKnowsEnoughMy OwnIssuesMinesComfortableModelsSkinsWho I AmBotherAssumption Author:Lily Cole
“A weakness of the random-walk model lies in its assumption of instantaneous adjustment, whereas the information impelling a stock market toward its "intrinsic value" gradually becomes disseminated throughout the market place.” LyingValuesWalksInformationModelsWeaknessAssumptionAdjustmentInstantaneousIntrinsic Value Author:Richard Arnold Epstein
“Mental models are deeply ingrained assumptions, generalizations, or even pictures of images that influence how we understand the world and how we take action.” WorldActionInfluenceModelsAssumptionGeneralization Author:Peter Senge
“Modern marriage is first and foremost a romantic and private union, but the tax laws and inheritance laws and religious implications that still surround this institution indicate that marriage has evolved without casting away its earlier purposes or assumptions. It's like we just keep building on this thing, piling new advancements on the old model.” FirstsStillsLawPurposeReligiousModernBuildingTaxesModelsInstitutionsUnionsAssumptionSurroundCastingInheritanceAdvancementImplicationsModern Marriage Author:Elizabeth Gilbert
“The Lockean assumption that if we put our labor to it then it becomes our own is totally fallacious. We have to figure out how to leave things alone, and build an economic system that's not built on a linear model, but instead on a cyclical model, because that's the natural world - it's cyclical and not linear. That is going to take a lot of transformation.” IfsWorldNaturalEconomicFiguresModelsBuiltLaborTransformationEnvironmentalAssumptionSustainabilityNatural WorldLinearEconomic Systems Author:Winona LaDuke
“NASA's Aqua satellite is showing that water vapor, the dominant greenhouse gas, works to offset the effect of carbon dioxide - CO2. This information, contrary to the assumption used in all the warming models, is ignored by global warming alarmists.” UsedWaterEffectsInformationModelsContraryAssumptionGlobal WarmingGasDominantIgnoredCarbonNasaSatellitesGreenhousesCarbon DioxideGreenhouse GasesCo2VaporAlarmistsAqua Author:Walter Cunningham
“Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas.” ShouldLooksTermForgetBehindsModelsInvestmentAssumptionFormulasInvestorsGeekImpressiveSkepticalPriesthoodEsotericNerdyBeta Author:Warren Buffett