Point of view

13.13.08 If you have been reading through the papers and online news sites at the moment you could be forgiven for thinking that the idiom “every cloud has a silver lining” should really read “every silver lining has a cloud” – isn’t it amazing just how fast the optimist camp converted to pessimism? But it is all really a simple matter of perspective, isn’t it? Glass half empty half full kind of stuff. For example take a look at the press around a recent consumer confidence survey that suggested that confidence in our markets has dropped by 20 per cent. Sounds pretty gloomy, but is it? If you look at the numbers from another perspective you would discover that almost 74 per cent of us, or those surveyed, think that we are alright and that whilst things are a little tougher it is going to be OK. It has always been amusing to me how some statistics are bandied about in order to suit the article or point of view being offered. A recent mainstream newspaper was sprouting data from Australia wide research with the catch line below. “Brisbane house prices suffered the biggest fall in the country in the three months to September, dropping 5.2 per cent.” I was surprised at the figures so I dug deeper but I had issues finding the supporting data. In fact, the data service provider that most professional use (RP Data) showed the median price change from the 2nd quarter 2008 to 3rd quarter 2008 had only slipped by 0.38%. When observing the same data across the past 12 months, September 2007 through to September 2008, one would see an 11% improvement in the Brisbane wide median house price. During my studies a professor offered me an insight into how important it is to get the data right and how it is almost more important to correctly interpret results. I was told an anecdote about a scientist who planted 30 trees and watered each tree a different amount as a way of simulating rainfall. At the end of the study some of the trees had grown tall and some hadn’t. Strangely, the scientist reached the conclusion that tree growth causes rain fall, or rather, that as a tree grows taller it rains more. That’s right, most of us would have reached the conclusion that as it rains more trees grow taller so tree growth is the result of rain fall not vice versa! Until Next Week ... Phill Broom