In high finance, perception is the currency that often outweighs the numbers. Whether it’s an investment banker engineering a merger, a private equity partner raising a fund, or a hedge fund manager pitching a strategy, the game is less about data and more about shaping the narrative in the top of the hierarchy, if not, equally important.

Example: Investment Banking

Take investment banking: the job isn’t just running DCFs and comps, it’s convincing a CEO that a deal is inevitable, that if he doesn’t strike now, his competitor will. The models are props, the confidence in the pitch is collateral. 

Example: Private Equity

On paper, they acquire companies to “unlock value” through operational improvements. In reality, the returns often come from leverage, aggressive cost-cutting, and timing the exit. However, when they're raising money, they don't sell the truth. 

Instead, they sell transformation. IRRs are dressed up by favorable assumptions, downside risks are reframed as “volatility,” 

IRRs (Internal rate of return): annualized return you’d earn if all the money you put into an investment and all the money you got back came exactly when expected. Basically, a high IRR looks sexy.

Real Life example:

Masayoshi Son poured billions into WeWork and aggressively pushed its valuation to $47 billion, not because the fundamentals justified it, but because he sold the perception that WeWork wasn’t just renting office space, it was a revolutionary “tech company” destined to reshape how people work. 

Investors, employees, and even media bought into the story, ignoring basic red flags like massive losses, questionable governance, and an unsustainable business model.

FOMO (Fear of Missing Out), authority bias (If Son backed it, it must be a golden opportunity), and Herd mentality were all displayed.