Tuesday, June 23, 2015
On cherrypicking chart intervals
IKN - ha ha Argentina is teh aewsomez you Americans suck. Wherein he publishes this chart to show us how awesome it is to invest in Argentina:
Of course the only thing you should really look at is the USD-terms performance of Argentina, to make sure you're comparing apples. So you can ignore the OHLC line and stick with the blue line.
But wow! Ain't that awesome? Argentina is up ~12% while SPY is only up ~2%! Thus buy Argentina! Buy buy buy!
Oh but wait:
Since this spring, The US has outperformed ARGT by 7%. While going nowhere, even.
Since mid-2013, the US is up 25% while Argentina has done nothing zip nada bupkas.
And zooming out to the past four years shows what an utter disaster Argentinian equities have been: after the 2011-2012 crash they still have not managed to recover in any meaningful way, while over the same period the S&P is up SIXTY SEVEN PERCENT. Uh, plus dividends. So make that about... 75%?
Thus, the importance of cherrypicking your chart intervals.
PS and so the Falklands will remain forever British!
My only regret is I can't force him to press play.