Isolated Information May Equal Trouble

Some recent events have reinforced my belief that singular information can easily lead to the wrong conclusion. We see this in the news. A police officer makes a mistake, and some assume all cops are bad. A protestor (or protest hijacker) throws something, and some assume the whole group is bad.

Singular information in other parts of life can also get us off track.

I was looking at some of a client’s financial reports. Revenue and production efficiency should move together. If efficiency goes up so should revenue, and vice versa. But they didn’t; Efficiency was solid, but revenue went down. I found out the reason for this, it made sense but at the same time didn’t make sense. In other words, I now understand why it happened, but production efficiency shouldn’t be calculated the way it is/was. If all I did was look at one or the other, I’d get an incomplete picture.

The same goes for COVID cases. We are constantly barraged with the numbers of new cases. Just paying attention to the top line number can get you worried (it sure has with Washington’s governor). But if you look at the positive cases in relationship to the number of tests, you’ll see the numbers are up because testing is up. As per the Washington Department of Health’s website last week, the percentage of positive tests is (was then) at about half of what it was in April. Want to see the positive numbers go down, test less (that’s a joke).

Take this into account when you look at any business whether it’s to buy it, work there, or offer advice. It’s like peeling an onion. You peel until you get the right answer, whether it’s the one you want or the opposite. When it comes to buy-sell deals, you’re going to see a lot peeling. If sellers thought there used to be a lot of questions, they’ll now find their “onion” just got a got larger.

“Not all those who wander are lost.” J.R.R. Tolkien

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