Practical analysis for investment professionals
04 February 2015

14 Charts Worth Your Time

Charts are fascinating. And I don’t just mean the 14 charts below. In one of the more interesting lectures I’ve ever heard, Bret Victor makes a number of really thought-provoking points that I hope you’ll chew over as you skim the images below.

In a discussion focused on designing new media to assist engineers and designers, he observes that “Media are thinking tools,” and by extension posits that “our representations of a system are how we understand them.” Think about that: If we are unable to represent a system visually, can we even understand it? He suggests that due to the limitations of how we represent complex systems, we may actually be unable to think the thoughts that lead to deeper understanding. Have you ever felt that way?

It’s kind of a crazy question. And if your head spins trying to represent your investment process visually, I don’t blame you. The important thing to take away from it, though, is exactly how far away these charts are from a clean visual representation of a system. Analysts often work with a tightly engaged latticework of mental models, but most would struggle to enumerate, describe, and integrate their own set without having previously considered the challenge.

So as you read, remember that you’re limited as well as empowered in your ability to understand. At Enterprising Investor, we’ll do our best to continuously present rigorous, provocative, and inspiring material — as well as philosophical questions and lots of charts. So subscribe away if that’s your sort of thing.

Haters gonna hate. It seems like that’s what almost everybody working on a bitcoin project needs to hear, and fortunately I can say that without reservation. Bitcoin manages to excite anarcho-capitalists while simultaneously triggering fears of a one-world government. Meanwhile, with only 382 citations in Google, the original paper describing the protocol cannot have been that widely read. I think the technology has a lot of promise, but I’d welcome a variant perspective in the comments below. That said, I’m likely to refer anyone throwing shade on bitcoin out of habit to my colleague Ron Rimkus’s excellent Bitcoin Proof.

Are you under the impression that computers keep getting faster and faster? Well, in one way you’re right — software keeps improving, which allows us to do more with less. But the actual clock speeds of computers have remained stagnant. What’s driving that? As this article notes, transistors are getting so small that it’s difficult to prevent electronic current from leaking out of them. It also has a fascinating statistic: Maximum CPU clock speeds only jumped by about a third from 2007 to 2011. From 1994 to 1998, they increased 300%.

Matt’s analysis here is spot on. You can play with the data yourself here, but these quits suggest a level of optimism in lower-level employees that hasn’t been present for quite some time. The November 2014 index reading of 547 is the highest we’ve seen in the United States since May 2008.

If you’re paying attention to the widening income gap — and believe me, I am — it might be surprising to look at an economic time series like this and find optimism levels across income segments narrowing, as opposed to diverging. I will continue to look for other data points suggesting a broadening base of optimism. But especially given the context of Matt’s preceding chart, this is provocative.

On first looking at this chart, I was surprised that the pay gap between genders appeared to be widest in the United States, Scandinavia, and other wealthy countries. A prior version of this post actually suggested that we take economics lessons from Japan. However, as Nikola noted in the comments, I totally missed this one. The legend is confusing, but my bad for writing a faulty analysis.

Does the phrase “don’t catch a falling knife” mean anything to you? This price chart of the gold dollar trading prices of Confederate bonds should be stapled to the trading screens of distressed debt analysts. It’s a reminder that you can make a significant short-term gain and then a total loss rapidly thereafter. These bonds rallied in almost a straight line after Hood’s army was destroyed, and then, well, we all know what happened to the Confederate States of America.

One of my favorite things is when a local trend does not correspond to a national aggregate. There are undoubtedly tons of places where water scarcity is causing significant issues, but aggregate water usage seems to have decoupled from growth in GDP. This is undoubtedly a good thing, but one has to wonder how it looks on the local level, particularly in the fast-growing arid/desert regions of the United States. This chart of the sustainability of various county water supplies seems to indicate trouble for most of the Southwest. Selfishly, it’s a good thing I live in New York City.

“Wow” is pretty much all I’ve got on this one. Is it possible a population that would have been confined to hospitals in prior generations is now in prison? I sincerely hope not.

I hate “boogeyman” comparisons in which a really scary circumstance is set against present experience to make the case that things aren’t all that bad. But in this case, I feel like it’s necessary because of pervasive pessimism about Europe as a whole . . .

Especially in light of data suggesting that conditions there may improve . . .

And the striking outperformance of US equities relative to the world (though outperformance can and does persist). Note that we also don’t know the timescale here, so this chart is of limited value except to indicate that a relationship is at an extreme right now.

It seems that US debt and equities just keep getting more attractive to the world’s investors though.

And you never know what’s going to happen. As David notes, a lot of people thought 0% was a floor in interest rates.

In closing, I’ll agree with Nick that the millennial obsession really needs to stop . . . unless you want to read some of our content focusing on this very important demographic and how the habits of the cohort are changing the world. I’m joking around, but if you only read one more thing on millennials, I suggest you make it this one.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©


About the Author(s)
Sloane Ortel

Sloane Ortel is the founder of Invest Vegan, an ethics-first registered investment adviser that manages distinctive discretionary portfolios of public equities on behalf of aligned individuals and institutions. Before establishing her own firm, she joined CFA Institute’s staff as a sophomore at Fordham University and spent close to a decade helping members adapt to a changing investment landscape as a collaborator, curator, and commentator. She is also a co-host of Free Money, a podcast for sustainability-oriented investors with a sense of humor.

3 thoughts on “14 Charts Worth Your Time”

  1. Nikola Iliev says:

    Re: The Gender Gap chart:
    You totally misread that one. It is the other way around. Japan and the emerging countries are at the bottom and Scandinavian countries are with the smallest gap. Your confusion came from the legend, which is misleading. Refer to the original article.

    1. Nikola —

      Many thanks for flagging my error! I’ve updated the post to reflect your correction, and appreciate your paying close attention. I agree the legend is quite misleading!

      Anyway, many thanks for reading! All best —


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