humility
Better roughly right
The rule
It is better to be roughly right than exactly wrong. A cash model down to two decimals is fake sharpness pretending to be truth.
Where it flips
But roughness is not permission to be careless. A range so wide it covers every price says nothing. The aim is a range narrow enough to act on and honest enough to admit what you do not know.
A long chain of guesses carried to many decimals looks careful, but it is only as sound as its weakest guess. Fake sharpness hides how wide the real range of outcomes is. Honest valuation names a range and what drives it, not a single confident number.
A worked example
A reader builds a model that gives a fair value of ₹347.82 for a retailer. Changing one fair growth guess moves it to ₹250 or ₹470. The two decimals were just show. The honest answer was 'somewhere around ₹250 to ₹470'. [illustrative]
How to spot it
- ·a single fair value quoted down to the rupee or paisa
- ·a model result trusted more than its shakiest input
- ·no range shown around the headline number
John Maynard Keynes · attributed maxim