As a financial analyst, which I have been for over 45 years, this story is significant because it actually brings up a very substantial difference between how I did financial analysis and how many if not most of my fellow analysts do financial analysis. In financial analysis the statistical method used is done in such a way so as to generate an approximate 5% margin of error. But in reality a 5% margin of error is generally so large that the statistics can actually be manipulated very easily. Based on various agenda or priorities. So consequently, when I first began doing financial analysis when I was 16 years old, I decided that using a 5% margin of error was just too large to guarantee any kind of truthfulness to the analysis.
So I began using a .5% margin of error. Meaning one half of 1%. Now granted, doing an analysis. With that small of a margin of error generally will take an extra 250,000 up to 350,000 calculations. In terms of physical work, before the age of computers, it meant that it might take an extra four or five days to complete the analysis. But with the advent of computers, and analysis. With a margin of error that small, Ken actually been done, within a matter of hours.
The problem is simple. The problem is that most people who want an analysis done. Generally have some kind of agenda, either stated or unstated, as the reason for doing the analysis. And as a result, they generally don't want an analysis that is so accurate that it cannot be manipulated to some degree. In other words they want and analysis that they can in fact manipulate, pursuant to their own particular agenda.
And as a result, the industry standard has become to do statistical analysis along the lines of having an approximate 5% margin of error. And in many cases even larger. In my personal estimation, along with others who are like me, industry-standard being set at 5% margin of error basically shows that for the most part, people want to be lied to. People don't really want the actual honest truth. And that really is very clear to see, when you look throughout the world and see the level of lying that goes on in every day life and in business and governments all around the world.
So when you have that level of dishonesty taking place in the world in every aspect of human life, it then becomes much more difficult for people like myself to make the case. I'm doing a statistical analysis. With a higher degree of honesty or credibility than the current 5% margin of error statistical analysis.
So with all that being said, when I see a story like this. The first thing that comes to my mind is that most of the statistical analysis that has been done regarding the polls, politically, our statistical analyses that actually have been done with a margin of error that is so large, that it is extremely easy to manipulate the statistical analysis based on various agenda, political or otherwise. Which means basically, most of these polls are really not very accurate. And they are basically telling people what they want to hear instead of what is actually the truth. I would hazard to say that Gallup is actually using the same 5% margin. As most other pollsters are using.
Which is why I really don't pay any attention to most of the statistical analyses that are done in the modern world. Because the number of financial analysts, like myself, or statistical analysts, who use the much tighter .5% margin of error, are relatively few. That's because trying to find someone who's actually honest about what they do, regarding statistical or financial analysis is very difficult. Because most people who do any form of statistical, financial analysis are generally more concerned with the money they are going to get rather than the level of credibility of the analysis they are doing. Which again goes to the same problem. That there is so much dishonesty and lying going on throughout the world and every aspect of human life, that trying to find anything that is really honest becomes very difficult.
Over the years I have discussed this one very important point of doing statistical or financial analysis. With a number of my contemporaries. And always the same complaint comes forward. That the number of extra calculations needed in order to generate statistical or financial analysis. With a .5% margin of error is generally a great deal of work or a great deal of time. And always, the answer is that the extra time is just not justified. The extra work is too hard. And the other answer. I have gotten is that my contemporaries will say that the client doesn't want us to do an analysis that is that correct.
These are real stories, ladies and gentlemen. Those are the actual answers that people in the business of financial analysis and statistical analysis have given me over the last 45 years of why they will not do the extra 350,000 calculations in order to generate a statistical or financial analysis at the level of .5% margin of error rather than a 5% margin of error. And of course, in my estimation, those answers are all lame. Because they're just making excuses. My contemporaries are making excuses why it's okay to do shoddy work. And to generate a financial or statistical analysis that is basically so easy to manipulate that the finished product really doesn't have very much credibility at all. And most of the reason for this is of course not only because there is so much lying going on in the world. But because doing the extra 350,000 calculations or more, comes across as being simply too much work. But I never looked at financial analysis that way. If the client was paying me to do an analysis for them. They got an analysis that was done at .5% margin of error. And that was done with such a high degree of credibility that there was no way that the analysis could be manipulated in any way. So that the data actually had a higher degree of credibility. Then it normally would at a 5% margin of error.
Many clients didn't like that. Because a lot of clients wanted to be able to manipulate the analysis based on some agenda, either stated or unstated. But the people who were really honest in the world and paid me to do an honest analysis were extremely gratified that I took the time to do the extra calculations. Because they knew that the analysis they got was something that was so accurate that there was no way that anyone could manipulate those figures or the data pursuant to any agenda.
So when I look at these polls, they are basically all crap. Because they are all done in a 5% margin of error. And the amount of items in a 5% margin of error is generally so large that it could run anywhere from about 1 million up to five or 10 million in the margin of error alone. But when you're using a .5% margin of error the number of items in the margin of error is generally as low as 5000 and normally does not go much higher than approximately 50,000. And at that level. The analysis then becomes so tight, meaning so honest and so solid, that it is basically impossible for the analysis to be manipulated in any way.
Now what I've been talking about is really the nuts and bolts of doing financial or statistical analysis. Because I'm talking about the margin of error. And the margin of error is that section of the analysis that certifies how credible the analysis really is. And it is a point that many analysts who don't really do statistical or financial analysis on a first-hand basis, really might not even understand. Because a lot of financial analysts and statistical analysts actually don't do their own work. They generally will send the work out to a statistical house for the statistical house to actually compile statistics based on what the financial or statistical analyst, has in fact assembled for the analysis. Generally in a large company that is normally a separate department from the financial analysis or statistical analysis department. Because it basically involves number crunching.
But it is a point that is extremely technical and suddenly intricate because it is the basis of how all these analyses are in fact done. And I would be a complete idiot. If I thought under any circumstances, that because I'm bringing this out once again, like I have before, that anything is going to change. Because it's not. But that's the reality about polls. So when you look at the Gallup poll saying that the Republicans in fact seem likely to win while other polls are showing more of a dead heat. The reality is that none of the polls are really done in such a way as to guarantee a high degree of credibility. All because most of the population in this world has become accustomed to accepting a 5% margin of error. But the world has become accustomed to accepting a 5% margin of error without really understanding the dynamics where the ramifications from accepting a margin of error that is that large. Because by accepting a margin of error that is that large. In any statistical or financial analysis, we as a population are basically saying that we don't want a statistical or financial analysis that is in fact more honest. That we really do want not to be told what is the truth. We want to be told what we want to hear.
And that is almost axiomatic. Because when you go back to the days of the Roman culture under Caesar, there was a philosopher at the time who coined the phrase, people like to be deceived. And that axiom or philosophical statement, dates all the way back to the days of Julius Caesar. Which shows you how long humanity has had a history of wanting to be lied to. Or wanting to hear what they want to hear instead of wanting to hear the truth.
So again, I don't really expect anything to change. It would be the height of stupidity for me to think that anything would change as a result of my discussing this one aspect of doing financial and statistical analysis. But having done financial analysis, as I said, since I was 16 years old. The fact is I've done so many millions of calculations over the years that it doesn't take me more than a few seconds to be able to see very clearly whether any statistical analysis or financial analysis has any credibility at all.
And that's the important point. Because if I can do that, so to. And it breaks down to being a personal choice. Because if we as a population really only want to hear what we want to hear instead of wanting to hear the truth. Then of course the 5% margin of error factor will never change. It's as simple as that.
Now as to whether or not one poll is more correct than another, or who is going to win this political competition. That's another story. In my mind it always comes down to one thing. It doesn't come down to political parties. It doesn't come down to what one party is saying about another. It comes down to just one thing. The disposition, psychologically, of the man was going to be the president of the United States. Because when that man becomes president of the United States, or that woman becomes the president of the United States, one of the responsibilities that goes along with that office is that they have control of one single piece of luggage. And that piece of luggage is a black suitcase. And that black suitcase has to be within arms reach of the president or the vice president 24 hours a day. The only time the vice president has access to that suitcase is that the president is in the situation where they are not able to have that suitcase with them.
And inside that suitcase are the launch codes and all of the electronic equipment necessary to launch the most powerful explosives, and nuclear weapons, in the history of humankind. That's the reality. So doesn't matter about political parties. Because as I've said before, there have been personalities from both political parties who have shown no degree of mental instability whatsoever until at one point in their career they showed a tremendous amount of mental instability which clearly showed they were unfit for service. One is the congressman Eagleton affair. The other was the incident with Alexander Haig in the Oval Office carrying a loaded 45 and waving it around and the Oval Office saying that he was in charge. While Alexander Haig was doing that, that black suitcase was not more than 10 inches away from where he was standing.
So you have to ask yourselves. Who do you really want in the Oval Office? Do you want someone in that Oval Office that may in fact have a knee-jerk reaction, whereby they will open that suitcase. Because the reality is, ladies and gentlemen, when you open that suitcase. There is no second chance. There is no turning back. Because when you open that suitcase the end result is that the most powerful explosives in the history of the entire world will in fact be activated. And that's a question that I really wish people would start thinking about when they think about the presidency.
Because the moment that suitcase is opened. And that decision is made you're talking about launching the most powerful explosives in the history of the world. So who would you really like to see having control of that suitcase. As history clearly shows, president Obama, for whatever reason has been a very cool minded and extremely grounded individual. Because that issue of the suitcase has never,. And yet that is one of the most deadly aspects of being president. Because when someone becomes president. They have control of that suitcase which means they can at any time with the justification of Congress and other parties open that suitcase and literally launch the most powerful explosives in the history of the world. President Obama has been very cool minded and has never even mentioned anything to do with explosive retaliation. But I wonder how often parties on the right side of the aisle have in fact mentioned that potentiality. And if they have mentioned it even only a few times, is that the kind of mental stability you want to have control of that kind of explosive power?
That's why polls don't really mean much to me. Because I don't think in terms of polls when I think about the presidency. I think in terms of that one piece of luggage. Like I said, when that piece of luggage is opened. There's no going back. There's no second chance. And the ramifications from opening that piece of luggage are so deadly that nothing that anyone could write would ever be able to fully explain the serious deadly effects from activating that kind of explosive weaponry. That's the presidency.
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