Barry Ritholtz, Columnist

Don't Be Blinded By Big, Scary Numbers

Context is critical when dealing with data.

October 14, 2015 at 3:42 PM UTC

Barry Ritholtz is a former Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

Why worry?
Photographer: YOSHIKAZU TSUNO/AFP/Getty Images

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Today I am going to indulge in a pet peeve of mine, one that I hope you will find helpful. It's about a bias called denominator blindness and it is the scourge of anyone who has even the most rudimentary understanding of mathematics in the real world.

A quick definition: Denominator blindness is the failure to put big, scary numbers into context. I am reminded of this every time I see one of these headlines: ABC Fund Loses $879 million; XYZ Corp. Cuts 3,000 Jobs; Stocks Drop 100 Points.