Lies, damn lies, and statistics!

Recent IPO statistics on the yield:

FY 2011 = 5.30%

FY 2012 = 5.51%

Take at the look at the charts below.

Big growth for the 1st chart?

Since I prefer round numbers, the same statistics in my mind graph is as the 2nd chart.

The difference between 2011 and 2012 is only 0.21% lah!

Is this example similar in our daily lives? You bet!

In my work, I always remind my colleagues to round up our Key Performance Indicators (KPIs) to a big round number – don’t create the “illusion” of precision; where none is needed.

I am now working in supply chain, so one important KPI is total lead-time. I always hate it when I see lead-time written as 17.65 days!? What is that?

This “long” lead-time means it’s likely by ocean transport  mode. So in reality, we just need to know whether the vessel/container will arrive in 17 or 18 days will do.

Even if it’s airfreight, we just need to know the hours and minutes. Estimated time of arrival is at 22:30 hours. Do we need to put in the seconds? You mean airport so precise?

Those who like to “add feet to snake” are usually people who have been working in the air-con office for far too long, and may have lost touch with reality on the ground… (Poor thing. I must bring them out more often!)

Of course in some industry, precision is the difference between life and death – like working in the nuclear industry or when undergoing brain surgery. But in most other industries, we don’t really need precision. It’s all marketing hype!

Let’s take photography. We compare the sharpness of lenses by the number of eyelashes visible in professional magazines. Do we count eyelashes when looking at photos in real life?

Don’t get me started with pixels…. If the biggest print-out we ever print is A4 sized, can you see the difference between 6 and 12 mega-pixels?

And for gamers, the video cards are evaluated by frames per seconds. But can the human eye see the difference between 40 fps and 60 fps? For cartoons, we only need 24 fps to get the natural motion effect ;)

Yup, the same marketing trick is used in finance and trading. All we want as marketer (many moons ago I studied marketing…) is to get you to “up-size”. And McDonald does it best! “Would you like to up-size sir?”

Just be aware next time you look at statistics. You may want to take a look at my other post on percentages: "I dont want percentages I want money!"

I am very happy to see many finance bloggers put their portfolio performance monthly. I find it a great way to gauge the mood of the market – I am more interested to see the asset allocation (how much cash, how much equities, how much bonds, etc); or to see what stocks they are vested in (growth, defensive, cyclical, etc).

I don’t really care whether it’s positive or negative. Or increase by what %. Our portfolio sizes are different, strategies are difference, personalities are different – what’s there to compare?

But I am sure some readers will get a kick out of this “benchmarking”, and declaring I beat so and so by 0.21 percent! It’s the Singapore habit – we need to be number 1!

Hey! In the words of my hokkien army friends: “Whatever makes you happy!” or “Hua hee du ho!”

两忘烟水里 – 天龙八部主题曲

This is my favorite 黃霑 song. Beautifully sung by 关正杰 and 关菊英.

It reminds me of the time when I was with my significant other at Hangzhou's west lake.

Loius Chia's sword fighting novels are in fact romantic novels in disguise - although feminists might think otherwise. But it's the ultimate male fantasy flick.... LOL!

I like this 80s TV version of Louis Chia novel. (Hey, don't laugh at the finger laser leh! At that time, it's state of the art effect!)

For those of you who are fans of this story, who are your favourite male and female characters? And why?

Dog in the manger

In old Macdonald’s farm, all the farm animals lived together peacefully in harmony.

But the peace was disrupted when farmer Macdonald adopted a new male dog one day.

The dog grew up in the city where he had to struggle and fight for his every meal. It’s a dog eat dog world of existence…

Now at the farm, the dog was lovingly cared for by old Macdonald; well fed and showered with love. What a difference from the dog’s previous life! No longer is the dog “branded” a stray. Now he is farmer Macdonald’s 2^nd in command.

Instead of being contented with his new found good fortune, the dog grew dissatisfied more and more each day. What gives?

The dog noticed old Macdonald gave to the horses and cows hay every morning – but not to the dog. Old Macdonald is being partial! The dog mumbles…

This jealousy brews and stews in the dog until one morning it just erupted.

The dog rushed to the manger where the hay was kept and jumped on top of it. When the horses and cows tried to take their morning breakfast, the dog barked and chased them away.

The dog thought – if I can’t have it, then others should not have it too!

There’s a little of this “dog in the manger” in all of us (OK, only me!)

Instead of seeing how our lives have improved, we keep on comparing what others have that we do not have…

And if we can’t have it, we do our best to bring others down to our level. We have “beggar thy neighbour” attitude.

Or we cast innuendos and aspersions on how they got to be better than us.

No?

Just look at how we the citizens behaved during the last election.

Roar of the heart from Jared Seah - 5^th descendant of a Chinese immigrant and I have a sister