Don't Count on it: The Perils of Numeracy

18 Pages Posted: 18 Feb 2003


The dawn of the Information Age has given momentum to an era in which Corporate America is increasingly fixated on numbers; an era in which the mantra seems to be "If you can't count it, it doesn't matter." In disagreeing with that syllogism, author John C. Bogle discusses the fallacies of some of the measurements we use and the pitfalls they create for economists, financiers, and investors.

His main concern is that investors focus too heavily on the momentary precision of the price of a stock, and not enough on the eternal vagueness of the intrinsic value of the corporation. Yet it is obvious, he points out, that in the long run, it is perception that reflects reality, and not the reverse.

In identifying four "Perils of Numeracy," Mr. Bogle argues that when measures become objectives, they are often counterproductive and self-defeating, and that numbers are a means and not an end, a condition necessary to measure corporate success, but not a condition sufficient. "To believe that numbers - in the absence of the more valuable albeit immeasurable qualities of experience, judgment, and character - are all that illuminate the truth," Mr. Bogle concludes, "is one of the great failings of our contemporary financial and economic system."

Suggested Citation

Bogle, John C., Don't Count on it: The Perils of Numeracy. Available at SSRN: or

John C. Bogle (Contact Author)

The Vanguard Group ( email )

100 Vanguard Blvd.
Mailstop V-22
Malvern, PA 19355
United States
610-669-6323 (Phone)


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics