Tips for helping us to pay attention to what matters and to ignore the noise…

And that’s a wrap.  The markets started flattish and pretty much steadily rallied all day finishing up about 1% across the board.

That is indeed exactly the kind of slow rebuilding and gradual intraday strength that the bulls should probably want to continue to see.

No trades for me today, but I did answer a whole lot of interesting questions in our chat today.  We’re cleaning up the transcript and I’ll send it out to you guys in a bit.

And before I go, I want to quote from this great article called “Sex, lies and pitfalls of overblown stats” in today’s FT:

Always ask yourself the question: “where does that data come from?”. “Long distance rail travel in Britain is expected to increase by 96 per cent by 2043.” Note how the passive voice “is expected” avoids personal responsibility for this statement. Who expects this? And what is the basis of their expectation? For all I know, we might be using flying platforms in 2043, or be stranded at home by oil shortages: where did the authors of the prediction acquire their insight?

In more intellectual environments, the figures presented may be the product of serious analysis and calculation. Always ask of such data “what is the question to which this number is the answer?”. “Earnings before interest, tax, depreciation and amortisation on a like-for-like basis before allowance for exceptional restructuring costs” is the answer to the question “what is the highest profit number we can present without attracting flat disbelief?”.

Be careful of data defined by reference to other documents that you are expected not to have read. “These accounts have been compiled in accordance with generally accepted accounting principles”, or “these estimates are prepared in line with guidance given by HM Treasury and the Department of Transport”. Such statements are intended to give a false impression of authoritative endorsement. A data set compiled by a national statistics organisation or a respected international institution such as the Organisation for Economic Co-operation and Development or Eurostat will have been compiled conscientiously. That does not, however, imply that the numbers mean what the person using them thinks or asserts they mean.

And finally, this little tidbit is so crucial — I always tune off any reporter or pundit who uses numbers like 96% over 43 years instead of just saying “double over the next four decades or so”:

But it is now easy to import data into a computer program without thought. The unwarranted precision of the projected growth in rail traffic – a 96 per cent increase, rather than a doubling – is a clue that the number was generated by a computer, not a skilled interpreter of evidence.

Good tips for helping us to pay attention to what matters and to ignore the noise.  See you guys tomorrow.