Tag: numbers

Encumbered by Numbers !

Posted on by markybrett
  • 5.25% Current UK Bank rate (August 2023)
  • 7.9% UK inflation rate (June 2023)
  • 2.9% drop in house prices in the UK (July 22 -July 23)
  • 2.25 % Bank of England May 2022 forecast for Bank Rate May 2023
  • 96% of GDP to 267% in 50 years’ time in 2071/72 (UK Office Office of Budget Responsibility)Net debt as a share of GDP rising – When has any UK Government- probably includes any western democracy- been interested in anything longer than the next General election
  • $300 trillion Global debt(December 2022 -World Economic Forum) (US accounts for just over 10%)
  • £0.70p average price of a pint of milk in the UK August 2023 (Office of National Statistics)
  • 1.5% increase in UK Retail sales July 2023
  • 1.9% increase in UK Retail footfall (same period)
  • 3 in November -The age of our Dog Ari
  • 384 – BC the year Aristotle was born
  • 7000 – the number of trade prices I am supposed to remember (or so think some of my customers)
  • 5.6 million -number Airbnb listings worldwide
  • 7.9 billion -world population 2023
  • 2.3 million US properties underwent foreclosure during the Sub Prime market in the USA between 2007 & 2008
  • -4.1% (note this is a minus figure) China’s deflation figure August 2023
  • 47.8% Turkish inflation rate – July 2023
  • 64 million- number of shipping containers world wide
  • 29 million beef cattle in the US in 2023
  • 20 million penguins on Antartica
  • 392,000 hotel rooms in Spain
  • £84 billion -valuation of Pinduoduo ( owner of Temu latest Chinese market place)
  • 9 million downloads of above Temu app in the U.K. , since launch in the U.K. four months ago (August 2023)
  • 91 indictments faced by Donald Trump
  • 3-1 the odds on Trump winning Presidential election in 2024

The point being….. We are bombarded by numbers every single minute of the day . Most we ignore but most are actually interrelated, and in some way effect all of us either personally, socially or in our working day. All of the above (with maybe the exception of the name of our dog) are interconnected in some way or another . Its a bit like the Chaos Theory of the butterfly that flaps its wings in Tokyo and ends up with a huge storm in the Mediterranean. This may not be an exact hypothesis but hopefully it gives as a reasonable picture as any Mathematical Theory does.

What we have to do is try to unravel those numbers that come to us and we think have an influence on our own businesses .

Unravelling is not an easy task, apart from anything many of those relevant numbers change . Only this week the UK HMRC stated that the tax take for first half of the year was higher than expected . Thus making the public purse look healthier . How so ? Everyone, whether companies, employed or self employed or retired and receiving unearned income, has to make a tax return. That Return determines how much tax is due . So where does all these unexpected tax come from ? Some shady deals where some weird taxpayers want to overpay their tax ? Me think not .

All of a sudden underlying inflation in the UK is dropping quicker than expected , when only last month we were being told it was very stubborn. So if the number makers cant get it right what chance have the rest of us.

My view of numbers is to look at your own. That is is to say if your operation and your customer base is still spending make sure it continues . By that I mean there are many retailers who look at the numbers (cost of living, inflation, media reports ) and think ‘must batten down the hatches‘. This usually involves buying no stock . So as they have no stock , they sell less and are proved right and buy even less. Look at what is happening around you, not what others are telling is happening elsewhere.

Consumer confidence jumped five points to minus 25 this month , beating analysts’ expectations and up from 30 points in the previous month, according to the research firm GfK, which has been tracking the data since the 1970s.

An improvement in expectations for personal finances over the coming year and better predictions on how the UK economy will perform pulled the overall index higher.

The August confidence bump indicates households were growing more optimistic over the summer before a recent string of downbeat economic data renewed concerns about the UK slipping into recession.

The Times August 25/08/2023

Vs

The net balance of retail sales in August tumbled to minus 44 per cent, down sharply from minus 25 per cent in July. It was the biggest drop in sales since March 2021, according to the latest CBI distributive trades survey.

The Times August 25/08/2023

Same Newspaper , Same day (they were actually on opposite pages ) 2 very different sets of numbers .

Many a good retailer has told me that an empty hook doesn’t pay your rent . If you can only fill it with product that nets you a penny . That penny is better than nothing . If a customer walks into a store and there is nothing to buy, then that is exactly what will happen. They will buy nothing . But they will go elsewhere and buy that something. I experience empty shelves or hooks virtually everyday . Every empty shelf or empty hook= Potential Lost business and customer.

The media is stuffed full of numbers and most have some form of veracity or at very least they have at a point in time and place. But Context is the critical consideration . How do they relate to my business ? More importantly how do we react to those that are relevant .

If your business is not doing well, it is too easy just to blame it on the cost of living crisis, inflation, or the economic situation . Any one, or all, of those may indeed be the reason but those are not in your control . You can’t effect any of those . There maybe other factors either local conditions or something within your operation that you can affect. If your business is doing well , the very same things apply , but look at why you are doing well and don’t let the negatives alter your course unless there are very direct or obvious reasons for doing so.

Don’t let the Number Encumber ….

The Numbers that Never Add Up……

Posted on by markybrett

There are those who may read this and saying I am talking about Statistics not numbers. There are, of course those who will say I am talking utter tosh. They maybe right but if you start any conversation about statistics, the line would go dead (or it would have done when we telephoned each other with telephones) . Anyway what do you work with in statistics , err numbers…If they think I talk tosh i have no counter argument.

During a time when everyone is trying to seek the truth about anything (not that I think finding the truth is anymore difficult than any other time), there is a tendency to believe that if you are given a number in answer to any question then it must be true. 20 divided by 5 = 4. No argument, it is a truth of ‘sorts’ .

One late winter day in 1971, 50 pennies= approx. 20% of £1, the following day, 50 pennies = 50% of £1. What changed ? The numbers in £1(or decimalisation for those who don’t know or can’t remember). So the number 1 did not change but the bits of it did.

A situation oft related is if you take the average wage of those travelling on a particular bus is say £15000 , and then Bill Gates gets on the bus, the average earnings run into billions . So what sort of average is that when only 1 out of say 40 is anywhere close to the average? Now, before I get thumped by someone saying a statistician would always knock of the extremes in any data set, but most of us aren’t statisticians and even then they often have their own interpretations. But we will come back to that .

Blind conviction in decision making that is based on metrics and figures that don’t actually hold up are running rampant

Simon Dutton .Founder of specialist Data Science, Machine Learning & Analytics Development Company

I am not going to even think of using the Damn lies and statistics as it is cliched and not helpful. The reality is the number on its own is a truth . What you do with that number , in what context , how it is interpreted , how it is used and when it is used are only a few of the many variables that can make that number untrue so to speak. The purveyor of the number is the one who needs be questioned .

Playing Bingo, you can be pretty sure the number is what its says on the ball. If the caller says then umber 66 , then that is exactly what it is a truth, you block out 66 on your card. 66 is deemed a ‘truth’.

For me a very simple everyday commercial example would be ……

That is all well and good my good Sir, but you are offering me a discount of 20%. I need a discount of 40% !

My reply

My very fine Customer, that can of course be arranged . But (whispering to myself) I will have to increase the starting price by 20%.

Here’s another….

Well tell me young man (yes some do address me like that), your 100 bestsellers ….

I am sorry no can do…100 bestsellers does not tell you anything . It only tells you what products we sold the most of , at any given time period, that does make them best sellers. There are loads of reason why we have sold a lot but none of may equal a ‘bestseller’ in the true ,meaning of the word

These maybe very simplistic (but true) , however in some different format or any other this type of discussion. it actually happens, a lot. The general answer is discount off what..Most consumers must be fed up to the back teeth of ‘Sales’ with up to 70% off. As far as best sellers are concerned the real numbers are the products that will sell well for the client to whom you are talking .

Off what ?

Everyday life revolves around numbers, our weight, our height,calories, how much we earn and spend , GDP, how much, how many, when, where, who, what , they involve a number somewhere. So you would think we should get them right but in so much of our lives decisions are made where the number is wrong or rather wrong in any one context.

Government Policy is underwritten by numbers (and of course political ideology) . This is directly from the Office for National Statistics(its that word again)

The average family size for women born in 1942 – for example – was 2.29 children per mother. In contrast, their daughters’ generation – represented by women born in 1969 – had on average 1.91 children per mother. Meanwhile, women born in 1984 had fewer children on average (1.02) by their 30th birthday than women born in 1969 – who had 1.12 children by the same age.

ONS 2019

How many women do you know had 1.12 Children ? Or even 1.02 ? In this context none of those numbers are actually real. If you have people in a room and their respective weights are 50kg,51kg,52.5kg,57.8kg,56.25gk, the average weight would be 53.51kg . Yet no one in that room would be the average weight. Within this simple example lies so many issues with health advice, BMI, Calorie intake, healthy weight and absolutely everything that is based upon an average. A male weighing 120kg and 6ft 2″ tall would be considered overweight and unhealthy but not if he plays in the back row for an International Rugby team.

Currently we are being swamped, daily, by numbers relating to Covid 19. More often than not they are used by politicians and journalists alike to make comparisons. Comparing ‘what’ with ‘what’. One set of data from one nation will be totally incomparable to another, as the way the data is sourced will be completely different from each and every nation. This is true of many national stats. Take GDP for example . Whose is the greater China or Luxembourg? Easy you may say….Luxembourg …well it is is if you evaluate it per head !

Simon Dutton .Founder of specialist Data Science, Machine Learning & Analytics Development Company

Single GDP comparisons are in themselves unprecise as mostly they are expressed in Dollars. Dollars like all currencies fluctuate in value. Therefore that value will change depending on what currency that is relevant to you. Example, if you took the UK GDP of the UK in dollars four weeks ago it would have shown one figure but if you translated it today that would have shown GDP growth because of the weakness of the dollar. Yes , I know we don’t measure it in dollars . But international analysts do. What I am trying to say that it is very easy to manipulate the numbers . Of course the numbers don’t manipulate themselves. Much like algorithms, that extraordinary word that implies data lead intelligence. As we are rapidly finding out these wonder ‘rithms‘ don’t create themselves, the data, that they are made up of, comes from us ‘umans . We decide on the numbers that will go into any algorithm, which is why they are often wrong as we discover on a pretty frequent basis.

10,000 steps a day has become the norm for a healthy body. Where did this number come from. It was entirely arbitrary . A Japanese Company company , on the back of the successful Tokyo Olympics, created the world’s first step counter Manpo-Kei , translated it means Ten Thousand Steps. This fabricated number, from a very successful marketing campaign, became the world’s (including the WHO) daily walking benchmark . It was never based on any science.

Advertisement for Manpo-Kei

The following two graphs (apologies for quality, tried but failed dismally to replicate them rather more professionally.) Show the same numbers in two very different ways. They measure the change in world climate from 1820-2015. The first one shows the temperature change (Fahrenheit) , as does the second (albeit in centigrade) . However, the second only show the change whereas the first is set against an entire temperature range making the changes appear much smaller. Or depending on your point of view the second illustrating it on a much smaller range !

Both illustrations come from the Book ‘The Number Bias’ by Sanne Blauw

Inflation is measured by all Developed Nation Governments , for a whole bunch of reasons, mainly to do with them , and they are all measured differently . In the UK were are really lucky as we have 2, CPI and RPI. What these both are and why both exist is an other story but essentially they are made from what are lightly called ‘baskets’ Probably there are created by ‘basket cases’ (English slang for stupid people) . These baskets are made up from lists of goods and services that we are all supposed to use regularly .

Some of the items are power drills, beers in night club, avocados, raspberries, 65″ TV , women’s gym wear, acoustic guitar, gym equipment and……. To some these may seem very representative of their life but to others will have no relevance what so ever. The inflation number is supposed to be a guide as to what is happening to prices. Yet if you are on the breadline and your rent has just gone up, the bus fare to work(if you have a job) has had a hike, then being told inflation number is only 1% , as fuel has plummeted, as has the price of 65″ TV , is going to mean diddly squat.

So next time a salesperson comes into your business telling you wow i’ve got some great numbers to show you, just be sure exactly who they are great for …

Perfect numbers like perfect men are very rare

René Descartes-Philosopher & Mathematician) (today he would have included women, I think (oh yes, I think, therefore I am….another of his -Descartes that is))