Quantation Philosophy

December 19, 2016
Strapped for a gift idea for a bright, inquisitive high-school student, a college student with career aspirations, or a young professional in finance & accounting, engineering, or any of the many other disciplines where presenting numbers is a critical success skill? Well, I have a suggestion!

June 13, 2016
God bless Matt Bud, The Financial Executives Networking Group’s Chairman! His post, lamenting spelling errors and silly grammatical mistakes, is spot-on. And what he has to say applies as much to NUMBERS as it does to words.

January 18, 2016
At a dinner party last night, one of the guests posed a question: Imagine a roomful of people chosen at random. How many people need to be in the room for there to be at least a 50% probability that at least two of the people have the same birthday? The answer to this puzzle tells us a lot about how we process risk & uncertainty, and how we should think when we build financial models.

December 28, 2015
Dishonesty can take many forms. Many are easy to spot, or at least will get caught out by a little research – or by the increasingly large number of journalists and organizations focused on fact-checking. Other forms are subtler. My “favorite” with respect to numerical information is cherry-picking – using a few carefully selected facts to support or refute an argument. The facts cited are usually correct, and the presenter might be well-intentioned, but the approach is intellectually dishonest. Let's consider some examples...

December 15, 2015
Last time we used a GRAPH to appreciate the long-term average performance of the U.S. stock market. It’s an important message for U.S. workers trying to save up for retirement. In this post, we look at equally important issue – the risk and uncertainty around that average, and this time it’s a TABLE that works best.

November 10, 2015
In an “Investment Writing” post, Susan Weiner observes that the frontrunner presidential candidates in both parties are the ones that speak the simplest English. We can assess the complexity of writing or speaking with metrics like the Flesch-Kincaid Grade Level score. Should we have similar metrics for our quantation?

October 28, 2015
A Washington Post article, citing this year’s report on the National Assessment of Educational Progress (NAEP), reports that from 2013 to 2015, fourth-grade and eighth-grade math scores declined somewhat nationwide, and were stagnant or slightly down in reading. Are we really doing worse, or are we wasting our time with all this testing?

September 09, 2015
The model we’ve been looking at – to help make your management reporting software decision – also provides an example of model design to ensure objective and honest analysis. In this post, we talk about why that’s so.

April 29, 2015
At a recent IMA seminar, I had the opportunity to sit in on several excellent presentations. One of them was Toby Groves’s overview of big data, a powerful software tool that has rightfully gotten much attention, but also has inherent limitations. It sometimes takes real wisdom and willpower to see when we should STOP using big data.

April 20, 2015
I love metrics. I love keeping score. And as a lover of metrics, I was delighted by the Bipartisan Policy Center’s announcement yesterday of a new metric: the Healthy Congress Index (HCI)! But as enthusiastic as I am about this new metric to assess the productivity of the U.S. Congress, there’s a fundamental problem that the BPC really needs to address.

December 15, 2014
I try to be positive. I really do. But yesterday I came across a post that is so ridiculous that I can’t stay silent. The writer observes that in every year since the Chicago Board Options Exchange’s Market Volatility Index (^VIX) was created in 1986, if the VIX traded at more than 34% above its one-month low at least once during the month of December, the S&P 500 showed a gain from that point until the end of the year. (Got that? There will be a quiz on this later.) The writer claims to have found a predictor “whose results have been so overwhelmingly consistent that it is hard to ignore.”

December 10, 2014
In my last post we looked at using a table, instead of a graph, to present a more complete, precise, and arguably understandable picture of how the composition of the U.S. House and the president’s party interrelate. And we were still able to take advantage of data visualization! This time, let’s take a look at using one of the most powerful tools in the quantation arsenal – the humble ratio – to really get a message across.

October 29, 2014
I am speaking next week at the annual national conference of the Association for Financial Professionals (AFP) in Washington, DC. Since financial planning & analysis (FP&A) professionals are a key AFP constituency, I thought now would be a good time for an open letter to the FP&A folks.

October 22, 2014
Today’s USA Today story about last night’s World Series game (GO GIANTS!) includes an interesting graphic, showing the success of “wild card” teams since they were first included in Major League Baseball’s postseason playoffs in 1995. 2014 is the first year that two wild card teams have faced off in the World Series – yes, a major-league record!!!

July 03, 2014
“Is Math Liberal?” – a recent review on the Mother Jones website of How Not to Be Wrong: The Power of Mathematical Thinking, a book by University of Wisconsin math professor Jordan Ellenberg – suggests that math is not just about computation, but also a framework for thinking through problems intelligently.

June 26, 2014
This week I had the privilege of presenting at the Institute of Management Accountants Annual Conference in Minneapolis. They are a great audience for my “Painting with Numbers” message and I thoroughly enjoyed interacting with the IMA members.

March 16, 2014
Yes, we’re still looking at Constant Contact’s (Nasdaq: CTCT) investor presentation, and the topic is still how tiny changes in the way we present numbers can have a significant impact on how our integrity and our ethics may be perceived.

February 12, 2014
As a financial executive and a consultant, I’ve been a part of or observed endless debates about what is the correct cost of capital to use in evaluating a project’s net present value (NPV). And I have to ask: Does this debate really matter?

February 01, 2014
In a recent session of my U.C. Berkeley class, “Presenting Quantitative Data Effectively,” we started with a discussion of the adjectives that describe “good” communication. “Communication” could be spoken or written, and on a sheet of paper, a computer screen, a whiteboard, or through speakers.

November 05, 2013
This week I attended an alumni function at my old high school, St. Albans in Washington, DC, where one of the events was a presentation by Michael Hansen, a St. Albans math teacher, on “metaknowledge,” the awareness of what we know and what we don’t know.

October 27, 2013
Much has been said about how tight-lipped the Obama administration has been about the enrollment numbers since October 1 for the private exchanges mandated by Obamacare. There is a lesson here about communicating, that applies just as powerfully to quantation (the act of presenting numbers) as it applies to all other types of communication.

October 18, 2013
I recently downloaded a Wall Street Journal article about the congressional food fight over spending and the debt ceiling. I learned that “on Oct. 17 [the Treasury] would be left with only about $30 billion.” I went on to learn that this amount was approximately equal to the Harvard University endowment in 2011, and the cost of Hurricane Ike in 2008.

April 02, 2012
Sometimes a clear presentation of numbers can really put things in perspective, and the absence of such a clear presentation can cause us to lose sight of what’s important. Put another way, good quantation can not only enlighten us, but first it simply makes us more aware.

September 16, 2011
This morning’s “Daily ‘Dog,” a website devoted to information and discussions about the public relations profession, introduced a “Best Practices Guide for Use of Statistics in Public Relations,” prepared jointly by the Public Relations Society of America (PRSA) and the American Statistical Association (ASA). This short document is excellent guidance not just for PR professionals, but for anyone presenting survey results and other statistical information.

April 22, 2011
Arthur Levitt, former SEC Chairman and Wall Street statesman, has an excellent piece in the Wall Street Journal, pleading for more “plain English” in financial disclosures. Invoking the ghosts of Mark Twain and Will Rogers, he observes that most readers and listeners react with suspicion when they encounter language that seems more complex and uses bigger words than necessary.

March 29, 2011
Have you ever been asked to make a decision based on numbers that you just didn’t understand? Sometimes those numbers were provided electronically or in a hardcopy report, but most likely you were in the audience for an oral presentation, with glitzy PowerPoint slides, loaded with impressive numbers, zipping past your eyes.

December 03, 2008
Financial Executive magazine arrived today with “Fraud’s House of Cards: Has Complexity Created an Unmanageable Situation?” by Lynn Brewer, an Enron whistleblower and founder of The Integrity Institute, as the cover story. Ironically (so say I), there’s also an interview with Charles Niemeier, a member of the Public Company Accounting Oversight Board, entitled “Can More. . . or Less Regulation Fix What’s Wrong?”

October 23, 2008
At a dinner last night, the Northern California chapters of Financial Executives International had the privilege of hearing from Sir David Tweedie, Chairman of the International Accounting Standards Board (IASB) and the person at the very top of my very short list of nominees for sainthood. Sir David spoke of the need for global adoption of the emerging International Financial Reporting Standards (IFRS).

October 14, 2008
First of all, if you think I’m actually going to offer an opinion on this subject, you’re crazy. Oh, no, no, no. We’re here to help you form your own opinion. You can do this in Four Easy Steps, by finding out...

October 10, 2008
I launched this blog by practicing on uninteresting, non-controversial topics like the U.S. financial meltdown and software revenue recognition. Now that I’ve gotten a few posts under my belt, it’s no more Mr. Nice Guy for me! I now take on the really tough issues, like tipping in restaurants!

October 08, 2008
In yesterday’s presidential debate, Barack Obama attributed the current financial crisis to eight years of Republican misrule and shoddy regulatory practices.

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