and then there are statistics

Dear Congressman,

It seems some business news networks make a living at sensationalizing information that is ... well.. to be blunt... rather misleading.

Take for example, the statistical trick of using different cut-off dates as a benchmark for measurement of gains and losses. I present to you, "Stock growth", a play in two parts.

ACT I

Mid-February 2009, somewhere in the suburbs of Charlotte, North Carolina. John the electrician is sitting in his Lazy-boy after a hard day of fixing faulty wiring at the local Baptist Church. His wife Mary is in the kitchen preparing dinner.


John: Damn!

Mary: (yelling from kitchen) What is it, dear! Did John Jr. drink your last beer again?

John: No, not today. I'm disgusted by the shares we bought in that stock your brother the broker talked us into, Megacompany, Inc.

Mary: How much has Russ cost us this time?

John: Well, let's see. It is down 68% from when we bought those 100 shares at 100 bucks, so we only have $3,200 of our initial $10,000 investment left.

Mary: So I guess asking for some spending cash for a shopping spree is out of the question....

John: (simply grunts as he continues to read the paper)

Act II

April 1st, same house, same suburb. Same position for both John and Mary. The phone next to John starts ringing.

John: Hello?

Russ: Hi John, it's Russ. Sorry I couldn't return your call sooner, but it has been crazy around here.

John: Yeah... right. Anyway, I wanted you to sell that Megacompany, Inc. you put us in.

Russ: Sell Megacompany, Inc???... but John... it is on a tear. You are up 72% in March alone with no limit in site. I would recommend that you buy more!

John: Oh... wow... I didn't realize that it was doing so well. How much are the shares worth now?

Russ: Let me see... it closed at $55 today so you are at $5,500.

John: Hold on... I was down 68%, you tell me I am up 72%, and I am still $4,500 lower than when you talked me into this last June....

Russ: John, it's been a tough market for us all....

(clicking sound as John hangs up the phone)



..