Numbers don’t lie.

No they don’t.

But that doesn’t mean that they have to tell you the complete truth. Numbers can be coaxed into telling a partial truth. After all numbers don’t speak themselves, “someone” quotes them as part of a “Story”. And that “someone” has the power to decide any “Story” he wants to tell and then pick and choose the data. A story is first decided, data is then manipulated to fit the story. Instead of “manipulated” you can call it ‘coaxed’, ‘massaged’ – any term that makes you feel least guilty.

Oh how I miss the wisdom of Sherlock Holmes

It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts

Just look around you. Based on “hard facts” Colgate is the #1 toothpaste in the world. And apparently, also based on “hard facts” Pepsodent is #1 toothpaste in the world. No one is lying, everyone is just giving you partial data that suits them. Similarly all news channels are the Most Watched News channels. What they probably leave out is the category under which they are deemed “Most Watched” – some are probably Most Watched in the category of “5 to 10 years age group who love nonsensical shouting and quarrelling”, but that’s not disclosed. That would hurt the “Story”.

This “Story Telling” is not just in marketing, it is rampant in software industry too. If appraisals are conducted based on some hard numbers like code coverage, defects injected, defects detected, defects fixed etc, developers soon figure out a way to manipulate those in order to provide a “Feel Good Story” about themselves.

Managers even go one step further. They can use the same facts and still spin it into a whole different story. I have seen a project that was perennially on fire. Developers were working 12 hours per day, even over weekends. I happened to see the final project closure report. It mentioned – with corresponding hard numbers of course – an effort overrun of just 5% !!!!. 50% extra every day + extra weekends equals 5% ?? That’s the power of Story telling.

Recently I heard an investment consultant talking eloquently about equities and how they are much superior than traditional fixed deposits. I have always been amazed at how they can convince people about the power of equity, no matter what the state of market is. If the market is up, they say look it is up. If it is down. they say equities are long term investment, it will always outperform traditional deposits. One thing I have noticed is they never define the term “Long term”. Is it 3 years? Is it 5, 7 or 10? That detail is left ambiguous. This gives them flexibility to come up with any data numbers they want based on the time period that is most convenient

So I thought why don’t I dig up some data and come up with few stories of my own. I took Infosys share price over the past 10 years. Infosys was chosen as it is a darling stock for all the investment story tellers. I am sure everyone must have heard at least one story that goes something like this – “If you had invested 10,000 in Infosys in 1993, you would have been a multi millionaire by now”. Unfortunately the Infosys website has only past 10 years of share data, so that’s all I had to play with. Couldn’t really come up with a rags to riches story starting from 1993. I also had to adjust the price of the shares as Infosys has time and again announced a 1:1 bonus.

I then came up with 2 main stories – Equities Suck & Equities Rock. And then I wanted to tell these stories over different time periods. Equities Suck over 3 years, Equities Rock over 7 years. Equities Suck even after 9 years and so on.

And guess what – I could build all possible stories from the underlying data.

Yes, each and every one of them!! I just needed to choose an appropriate start date and end date. And Lo and Behold – I had a story.

I have published all the stories in Story Board Format using Tableau Public – What Story Do You Want To Tell

In each of them, green line indicates a traditional fixed deposit performance, while the orange line indicates Infosys Share performance.

The last one shows how the returns have oscillated over multiple year time windows. That will give an idea of what dates to pick if you have a particular story in your mind.

So what are you waiting for? Go ahead, pick one or create your own.

What’s the story you want to tell today?

 

 

 

 

 

 

 

 

 

 

 

 

Advertisements