The Importance of a New Numerical Model in Investments

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In real life, for your own personal savings, you don't just care about the expected value. You want to make sure you have enough money to have a house and eat. In charitable giving, that is where you're like, hey, I got this certain amount of money. I'm going to give it. Since I'm not getting any returned, I'm not worried about it. The only return I'm getting is like good feelings or whatever. So what I would prefer in both the investment case and in this case is that you doing a new numerical model can be useful, but also back it up with other ways of looking at the problem.

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Dr. Jim Davies is a professor of cognitive science at Carleton University. He is the author of Imagination: The Science of Your Mind's Greatest Power; Riveted: The Science of Why Jokes Make us Laugh, Movies Make us Cry, and Religion Makes us Feel One with the Universe; and Being the Person Your Dog Thinks You Are: The Science of a Better You. He co-hosts (with Dr. Kim Hellemans) the award-winning podcast Minding the Brain. Learn more about him at jimdavies.org or follow him on Twitter or Facebook.

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