Are You Being Fooled By Statistics?

The world’s worst defender of statistical manipulation is the government, followed closely by the financial press. Yes, I guess that counts me too. We are two years away from our nation’s next presidential election, which has historically been good for stocks, so I thought I would normalize some of the government’s economic data to give you a better understanding of the true strength or weakness in our economy. I am not trying to persuade you one way or the other, I am merely trying to remove the deception from the data. I will present a case for the bears followed by the bulls, as there are two sides to every argument and I encourage you to make up your own opinion based on the facts.

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Private portfolio management for individual and institutional clients.
Quantifying Risk

Ever since W. Edwards Deming helped transform Japan from devastation to manufacturing excellence following World War II, statistical analysis has revolutionized American businesses. Initially used to improve quality in manufacturing, statistical analysis is now a part of every business today. As individuals, we see its impact most frequently in our own lives in credit scoring, a mathematical algorithm used by lenders to judge the credit worthiness of borrowers.

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At ProfitScore, we remove emotional bias from our investment process by using sophisticated, quantitative decision support models that take the proven mathematical principles of risk analysis and apply those principles to the financial markets.

While past market performance does not predict future performance, there are identifiable characteristics that consistently reoccur in bull and bear markets, in sector upswings and drops, and in the returns of different asset classes. By tracking and analyzing those characteristics, ProfitScore and our team of investment managers are able to quantify risk and reward to actively position client assets to benefit from constantly changing market conditions.

Naturally, not every move is profitable, but our track record has shown the advantage of this approach over time.