Financial Mathematics Text

Sunday, June 23, 2013

Poincare on Two Types of Mathematicians

In Henri Poincaré's book, Science and Method, there is an interesting discussion on mathematics education. I'll quote a relevant portion:
Many children are incapable of becoming mathematicians who must none the less be taught mathematics; and mathematicians themselves are not all cast in the same mould. We have only to read their works to distinguish among them two kinds of minds - logicians like Weierstrass, for instance, and intuitionists like Riemann. There is the same difference among our students. Some prefer to treat their problems "by analysis," as they say, others "by geometry". 

It is quite useless to seek to change anything in this, and besides, it would not be desirable. It is well that there should be logicians and that there should be intuitionists. Who would venture to say whether he would prefer that Weierstrass had never written or that there had never been a Riemann? And so we must resign ourselves to the diversity of minds, or rather we must be glad of it.

Friday, June 7, 2013

Uncertainty and Margin of Safety

A topic that comes up frequently, and one that I think is not well understood, is the concept of "margin of safety" in value investing. The idea goes back to Benjamin Graham. But before we do that I want to take a detour through the notion of uncertainty.


There are a few different concepts associated with uncertainty and a few of them have investing applications. I'm going to focus on one which is how it's often used in physics which is measurement uncertainty