Business Report: Crisis at a Glance - The law of large numbers

HONOLULU (HawaiiNewsNow) - It's time for Crisis at a Glance!!!

For economic recovery you want companies to grow.

The president of Goldman Sachs says Apple seems undeterred by the law of large numbers. Apple CEO Tim Cook replies that he doesn't believe in the law of large numbers. Both men thus demonstrate they have no idea what the law of large numbers is.

The law of large numbers has nothing to do with anything corporations do. It is about RANDOM activity.

The law of large numbers says, the more often you do something random, like throwing dice, the closer the collective results will come to the average outcome.

The only thing relevant to corporate growth that has anything to do with large numbers is the way percentages work. When you make 10 million dollars profit a year, 10% growth is 1 million dollars. When you make 100 million a year, 10% growth is 10 million. When you make 1 billion a year, 10% growth is 100 million. The bigger the numbers, the harder it is to sustain 10% growth.

And if Tim Cook doesn't believe that, he's in for an unpleasant surprise.

So endeth Crisis at a Glance!!!

Copyright 2015.  Hawaii News Now.  All Rights Reserved.