Table of Contents

from The Two Headed Quarter


by Joseph Ganem


Confusing Numbers

Part I Daily Deceptions

1. Shopping: Meaningless Comparisons

  • Elements of Deceptive Math
  • Comparison Shopping
  • Anchoring Effects
  • The Negotiation Principle
  • Summary
  • Advertising the Nonexistent

2. Averaging: Numbers In Place of Judgement

  • A Class Where All the Children Are Above Average
  • Meaningful Averages
  • The Numerical Outcome Principle
  • Examples of the “Numerical Outcome Principle”
  • Summary
  • Why I Would Fail Third Grade Math

3. Financial Planning: Is It Reasonable?

  • A Different Way of Planning
  • "Fermi Problems"
  • Investing in a Business or Job
  • Limits and Saturation
  • Investing in Stocks
  • The Mediocrity Assumption
  • Summary
  • The Tale of the Quarter Without a Tail

4. Charting: Pictures Worth More Than a Thousand Words

  • Different Pictures of the Same Data
  • Your Tax Dollars
  • Charts Not Seen
  • Defining the “Deficit”
  • Stock Charts
  • Summary
  • Medical Malpractice: A Two-Headed Quarter?

Part II Income

5. Earning and Saving: The Deceptive Math of Income Growth

  • The Widening Gap Between High School and College Math
  • The Disconnect Between the Math Curriculum and Professional Practitioners
  • Making Math Relevant: Assessing Reading Comprehension or Math?
  • The “Chinese Room”

6. Investing: Wealth for the Future

  • Lines versus Exponentials
  • The Doubling Rule
  • Fixed Growth Rates
  • Growth Not Measured in Dollars
  • Integrated Fixed-rate Growth
  • Changing the Compounding Interval
  • Saturation
  • Summary
  • Mixing Water and Oil

7. Gambling: The Probability Paradox

  • Probabilities for Random Sequences
  • The Game of Poker
  • The Zenith Radio Data
  • The Frequency of Improbable Events
  • How long is long enough?
  • The “Gambler’s Fallacy”
  • Probability and Gambling
  • Books on Gambling
  • Summary
  • Music or Noise?

8. Risk Taking: Going Broke to Get Even

  • Risk
  • Behavioral Finance
  • Prospect Theory
  • When Bad Bets Are Good
  • Insurance
  • Mental Accounting
  • Summary
  • When is a vice a virtue?

Part III Loans

9. Borrowing: A Numerical Black Box

  • A Black Box
  • Monthly Payments on a Loan
  • Periodic Finance Rates
  • Total Cost of a Loan
  • Equity Accrual
  • Payments on Intermediate-term Loans
  • Total Cost of Intermediate-term Loans
  • Total Cost of Short-term Loans
  • Summary
  • Yo-yo Financing

10. Evaluating Loans: Phantom Finance Charges

  • The Effective Interest Rate
  • Introductory Teaser Rates for Credit Cards
  • The 0 Percent Financing Scam
  • Home Mortgages
  • 30-year Mortgages
  • Accelerated Mortgage Payments
  • Bi-weekly Mortgages
  • Low Interest Rates versus Low Prices
  • Summary
  • "We're required to by law."

Part IV Misunderstood Math

11. Voting: Number-Dropping

  • The Myth that Precise Means Accurate
  • Precision
  • Accuracy
  • Elections and Laws
  • Summary
  • Negative Taxation

12. Estimating: The Three Sizes of Numbers

  • Number Size
  • Scientific Notation
  • Language and Scientific Notation
  • Reasonable Number Sizes
  • Number Size and Risk Analysis
  • Summary
  • Making Sense of Safety

13. Measuring: Is it valid?

  • The Signal-to-Noise Ratio
  • Signal Averaging
  • Correlations and Causes
  • Summary
  • Metal Legs at the Airport

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