Trying to convince your man to buy you that fancy red light sauna? 😎 Why not make him a Power Point presentation? 👩🏻💻 Arm him with the facts. Case closed.
In today’s Wild West world, it’s easier than ever to get fooled by BS data. If you’re not careful, that bogus chart you’re looking at could lead to bogus financial decisions. 🚨🥴 Fortunately, we’ve got a cheat sheet to help you see through the poo.
Here’s Five Fast Facts on bad financial charts:
- 📊 Finkle is Einhorn - Many charts show real correlations between two data points. Think: layoffs and rising credit card default rates. On the flip side, a bad chart could show you two lines moving in the same direction, but the data’s unrelated. Just because hot cocoa and snow blower sales both jump in the winter doesn’t mean one causes the other.
- ⏱️ Bad Timing - If a bad actor is trying to prove a point, they may only show you a snapshot of a larger timeframe. For example, a chart may show you a huge jump in stock value over a week. But if you zoom out, it’s only a blip. Perhaps over a year’s time, the stock actually is down.
- 📈 Axis Practice - A chart’s axis is made up of the horizontal and vertical lines that outline the range for the data. It’s like a neat little frame that holds everything together. Without an axis, data can easily be bent to fit whatever point a person’s trying to make. No axis = proceed with caution.
- 🕵️ Source Awards - Whenever you look at financial data online, always check the source. No data source is always a red flag. If the source isn’t from a reputable financial industry publication, media outlet, or well-known expert, be skeptical.
- 😵💫 WTF? - If a chart looks like an overall hot mess, trust your gut. While some charts are meant for trained eyes, most come with simple, straightforward explanations. The good ones are meant to be understood.
🔥Bottom line: Don’t let these financial nerds intimidate you. Next time you’re browsing the net, remember this hard and fast rule: if a chart feels phony, it probably is. Seen any charts about foreclosures lately? Looks like even the legit ones are bringing some bad news. Head here to find out why foreclosures are on the rise.
Were you ever fooled by bad data?
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