Statistics, Trends, and Other Myths

Recently, I heard a politician admonish his opponent in a debate by saying, “You may be entitled to your own opinion, but you’re not entitled to your own facts.” In reality, it seems that every person representing every side of every issue is armed with their own facts that support their position. Many times, these people do not objectively look at statistics. They instead search for statistics that support their previously-held view.

Harry Truman was fond of saying, “There are lies, damned lies, and statistics.” Among my entrepreneurial endeavors is a television network I founded called the Narrative Television Network. In the TV industry, we survive on ratings as these statistics determine what can be charged for commercials. Unfortunately, the statistics and ratings that were designed to clarify the marketplace are used to make it murky and even harder to understand.

If you believe the rhetoric and hyperbole, every network is number one. We have hundreds of channels available to us, and they can all find some minute spectrum of the marketplace where they come out on top. It may be overnight ratings among left-handed Eskimos, but everybody in the television industry is number one.

People often use trends and current conditions interchangeably. Current conditions might include the temperature at noon today. This can be accurately compared to last week, last month, or last year, and certain conclusions can be drawn such as it is hotter in the summer than in the winter; however, if you take a current trend and try to make it an ongoing condition, you will quickly find your argument to be absurd, irrelevant, or even dangerous. If my beloved St. Louis Cardinals win the game on the opening day of the baseball season, which they thankfully did, this does not mean that they have established a reliable trend that will result in them winning all 162 games this season. If your child has a growth spurt and adds four inches to their height in one year, it doesn’t mean this will continue and they will be 12 feet tall when they go off to college.

Warren Buffett who often brings wisdom and clarity to complex situations, admonished over-exuberant investors by saying, “Trees don’t grow to the sky.” Mr. Buffett was cautioning novice investors to remember that a 20 percent stock market rise in one year makes it more likely that the following year will bring a reversal not a continuation of the unsustainable growth rate.

As you go through your day today, remember statistics make great tools and horrible masters.

Today’s the day!
Jim Stovall is the president of Narrative Television Network, as well as a published author of many books including The Ultimate Gift. He is also a columnist and motivational speaker. He may be reached by email at Jim@JimStovall.com; on Facebook at www.facebook.com/jimstovallauthor; or follow Jim on Twitter @StovallAuthor.

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