Quantitative Analysis

Next time some banal store clerk tosses a "Hey, how ya doin'?" at you, throw this one back at them:

"I slept 7.3 hours last night, which trended 3% worse than normal. My stock portfolio is up 1.2% this morning, so that's good. I impressed my boss with my last earnings forecast, which proved to be 3.2% pessimistic, meaning that our company is doing a bit better than even we had thought. And when I stepped on the scale this morning, I discovered that I had lost 1.7 pounds, pre-dumping. So I'd say that I'm doing quite well, thank you."

So that's quantitative analysis of a day, or a moment in life. Apply the same thing to stocks and bonds and other securities. If investors only do quantitative analysis and no actual, um, thinking, they usually get led astray, or at least into bad markets or bad market cycles or bad turns one way or another. The data that they analyze, from revenue growth to margin analysis to units shipped in x many locations, is usually incomplete, if not inaccurate. But if they are only doing quant analysis, then all the qualitative factors (factors which actually comprise the then-wrong-numbers) get ignored. Which leads to problems down the road.

Bad decisions depress investors who get quantiatively poorer, and then they need a different kind of analysis. The kind with a long couch.