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'The rule of '72' can be used to evaluate ‘bedrock’ underlying economic conditions - as described by Peter Drucker in The Practice of Management.
Instead of forecasting the future, this method focuses on past events...
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Whilst there isn’t a formula set for Big Picture Math, the following examples highlight the methodology of looking for the big part of the argument.
In Poor Charlie’s Almanack, Charles Munger provides this piece of numerical reasoning as he discusses the potential of a hypothetical Cola company:
We can guess reasonably that by 2034 there will be about eight billion beverage consumers in the world. On average...
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Alfred Rappaport and Michael Mauboussin get to the heart of the rollout success of McDonald’s in Expectations Investing:
The world's leading fast food purveyor, McDonald's, is an illustration of how fixed-capital investment efficiency can add value. Through standardization...
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The last example of math reasoning is taken from a Heard on the Street article in the Wall Street Journal:
Washington's "cash for clunkers" isn't just a way of getting you to buy a car you didn't know you wanted. The administration also touts its green credentials.
Assume 250,000 vehicles are exchanged...
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