Critique the analysis, not the person: professional behavior

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Submitted by powayseller on September 25, 2006 - 10:35pm

Some people who disagree on this forum react by criticizing the *person* who made the analysis, rather than the *analysis* itself.

This type of criticism occurs daily at Roubini's blog, where some people really lay in on him, but offer no facts or data of their own. This also happens here at piggington, with me as the prime target.

My work mentors taught me never to attack a person, but to debate the idea. I learned that when I disagreed with someone, I had to focus on the topic and give the reasons that my idea was better, why my way would yield better results and how much money that would save the company, but *never* accuse the person. Keeping the emotion out is very important in the workplace. Those who master this skill will probably rise farther in their careers.

Instead of criticizing a person, criticize that person's line of reasoning. Do you want to show me you are smarter than I, or just more emotional?

If you disagree with me, make a bloody good case for WHY! If you want to show that your analysis is superior, you do it by giving a superior analysis, not by calling names.

Submitted by sdduuuude on September 25, 2006 - 11:11pm.

Just to clarify - if you say someone is a consistently bad analyst, is that criticizing the person or the analysis?

Submitted by justme on September 26, 2006 - 12:22am.

I did not see powayseller call someone a consistently bad
analyst.

This is your own conclusion to draw, for example
if powayseller showed a number of times that someone;s
analysis was bad.

Submitted by powayseller on September 26, 2006 - 6:03am.

Calling someone a consistently bad analyst is a personal statement. I agree with justme, that we show someone's analysis is bad by showing the weakness in their arguments and then everyone can see it was a bad analysis.

Professionals debate the topic, not the person. Hugo Chavez's inability to stick to that dictum made him look like a "comic strip cartoon". Instead of laying out why he disagrees with our policies, he started name calling. That made him look like a kid with a tantrum, and it was hard for anybody at the U.N. to take him seriously after that. (Any other comments about Chavez, please start a new thread; let's save this one for "staying on topic").

Submitted by FormerSanDiegan on September 26, 2006 - 8:42am.

Then why do we pound on Daveid Lereah so much ?

Because he's been wrong and behind the curve consistently.

I agree with Sduuuuude. If the messenger is wrong so many times it becomes part of the message and an objective evaluation of the message often does include "past performance".

Submitted by JES on September 26, 2006 - 8:49am.

Although we should strive to focus on attacking the issue and not the person, there are plenty of times that the person needs to get dragged in as well. EG: There are those who are not fond of our current president, and they are well within their right to be critical of him and his programs.

Submitted by powayseller on September 26, 2006 - 9:40am.

We pound on Lereah because he is misrepresenting the facts, i.e. he's definitely lying because he has something to gain. No matter how much I would debate him, I'm certain he would not change his tune, because he is married to his agenda. So is Alan Gin, and that's why I called Alan Gin a liar, and I signed my name to that. There is no use in debating with them, as their main goal is protecting their agenda, not learning or spreading the truth.

I don't think anyone on this forum intends to mislead. In a forum, disagreements should be handled as they are in a debate, where you win not by shouting louder, but by arguing better. Logic trumps.

We don't have agendas here. We're willing to change our minds if a better argument is made. For example, when I first came here, I was sort of anti-realtor, but now I'm more pro-realtor, I was anti-gold and now am pro-gold. I don't have an agenda to protect, just a sincere desire to learn with you all. I compliment people who are better than I. I compliment Chris on his trading, jg on his models, Rich on his early bubble call, lindismith for being an entrepreneur, etc. I started this thread mainly because some people like picking on me just because they disagree, and I was hoping this forum wouldn't degenerate like so many others. Let's keep it positive, folks.

Submitted by PerryChase on September 26, 2006 - 9:52am.

Give powayseller a break. I, for one, am willing to forgive her for any faux-pas because I'm thankful for the analysis. It was very bold of her to come straight out with a -50% forecast. I believe that many of the scenarios she considered are coming to fruition. Few have the guts to say what she did. Most would incrementally change their forecast in small steps as the situation deteriorates.

I think that powayseller has super analytical skills and a great feel of where the market is heading.

When you try to predict the future you always have to make assumptions like x% of ARMs will default. Sure they haven't defaulted yet but let's just imagine that they would.

So what if her delivery is at times blunt? If she were circumspect and qualified everything that she said as only possibilities, her writing would be very boring and long-winded.

Submitted by anxvariety on September 26, 2006 - 10:48am.
Submitted by woodrow on September 26, 2006 - 12:07pm.

We pound on Lereah because he is misrepresenting the facts.

That's EXACTLY why a few of us called you out last night PS. You were misrepresenting facts!

"1.46 million loans at risk" does NOT equal "1.46 million defaults expected".

Sorry, but your title and analysis was very misleading. When called on it, you refused to acknowledge your error and instead became very thin skinned. I AGREE with 90% of your analysis PS, but you become far too defensive when challenged. If someone points out an error in your analysis, it's nothing personal, just constructive criticism.

Finally, it's okay for you to call analysts "liars" and run posters away from this board, but when you're called to task on an obvious error, you start threads asking not to be picked on? Can't have it both way, Mrs. :)

Submitted by JES on September 26, 2006 - 12:12pm.

Let's just all be a little thicker skinned around here and everything will be well and dandy. Don't start talking about my momma though or we gonna have trouble!

Submitted by speedingpullet on September 26, 2006 - 1:36pm.

Yeah:

Hate the Game and not the Player....;-)

Submitted by sdduuuude on September 26, 2006 - 5:19pm.

Powayseller kinda sorta does have a point here, but she also needs to realize that people regularly present very good arguments against her points and she chooses to not listen quite often.

This choice - on her part - tends to bring in more personal comments than are acceptable.

But - to her point, when people are presenting such points, there are often little personal barbs attached to them.

The issue is exacerbated by the fact that powayseller doesn't take the time to listen and learn from the points against her arguments, she only sees the personal barbs and reacts to those, with the assumption that any argument with personal attacks cannot possibly be a valid analytical argument.

Then, we just have a mess. We have some people pointing out how closed-minded she is, some people pointing out a problem with her analysis and some people pointing out how she is reacting to the personal comments.

Take This thread for example. The complaint was simple - that she spun the article into a title which was very mirepresentative of a) reality and b) the quanitative (corrected) intent of the article.

Powayseller's best response would have been:
"Yes - I understand what you mean. I took the words 'at risk' to mean '100% chance of foreclosure' when in fact 'at risk' means some chance of foreclosure, maybe around 10% so my title is a little too aggressive."

Wow. That would have been impressive, but she couldn't pull it off. Instead she defended the major blunder of her title. Why? I have no idea. Was it the personal comment by Daniel? Perhaps.

Fact of the matter is - woodrow did a great job of pointing out that powayseller's title misrepresented the article, and didn't attack powayseller personally. Powayseller did a crappy job of defending herself against woodrow, and instead started this post, complaining about personal attacks

Personally, I think she now has a bad reputation for jumping to conclusions, and spinning articles inappropriately, and defending the wrong argument. She only continues to dig herself deeper into this reputation and I will glady help her dig by pointing out the error of her ways. I'm glad woodrow is helping.

Every once in a while she makes a good point, but those are now lost because, in what appears to be a personal crusade to show everyone she is the most brilliant person on the forum, she regularly discloses that she does not present clear, organized arguments.

I'm sure she is very nice and I try to stick to the topic, but like it or not, her reputation is going to start becoming more and more a part of the arguments against powayseller because of her personality.

I must say - I take issue with her analysis and conclusions on a regular basis. She can complain about personal comments after she appropriately defends the analytical ones.

Submitted by sdduuuude on September 26, 2006 - 3:10pm.

Perry Chase wrote:
"I think that powayseller has super analytical skills and a great feel of where the market is heading. "

You, Perry Chase, have been fooled, my friend. She has great research skills. She finds things others have done and presents them. She is best when she presents them without comment, and worst when she tries to add her own insight.

Her blunt delivery would not pose a problems to me if only she were a better analyst.

Submitted by FormerSanDiegan on September 26, 2006 - 3:34pm.

Maybe as a group we do not have paid agendas, but as a minimum we have biases and desires that things turn out in our favor. We read as much into incoming data as possible to support our view, and point out flaws in incoming data that go against our assumption. That's human nature. It's only when we reconsider our own biases that we move forward and learn.

When I say to my friend that rents are going to start dropping and my friend says, "You are on crack." I don't take it personally that he believes that I am partaking in the consumption of a highly addictive agent.

Instead I take that time to reconsider my position and determine whether the current vacancy rate of 1.8% might support my friend's point of view. Whether or not my friend led me to the data, at least his reaction is enough to get me thinking, even if he is the one smoking crack.

Submitted by PerryChase on September 26, 2006 - 5:04pm.

On the point of powayseller not presenting original information, my response is that NO ONE, not even the professional forecasters, develops all original data. They all use some information developed by others then develop their own arguments about what that information means.

Submitted by sdduuuude on September 26, 2006 - 5:18pm.

I have no issues with it either - it is usually very useful research.

Submitted by sdduuuude on September 26, 2006 - 5:21pm.

I edited a post (changed "qualitative" to "quantitative") and it moved it from its original location to the end. How annoying.

Submitted by Chrispy on September 26, 2006 - 6:20pm.

sdduuuude, you just wanted to have the last word, right?

Submitted by LookoutBelow on September 26, 2006 - 7:51pm.

Hard NOT to get emotional during such discussions. I like it ! Its kinda sassy ! Heated conversations are great. You get to find out who the real believers are and why. I am interested in everyones opinion on investment, unlike religion.

PowaySeller has some great analysis and a very sharp mind. Love her or hate her, she is one of my favorite posters here.

As far as the 1.46 million loans at risk...they are at RISK, ...maybe none will default, maybe ALL will default. Its like bad credit, once you get it you get to go to the back of a long, ugly line. Doesnt matter how you got there in the lenders eyes, the only thing that matters is you are in THAT line. 1.46 million people are in a potentially similar line, like it or not they are the holders of questionable loans. They got into those loans for some reason, the same reasons are also why those loans are risky. They have a track record on non payment on some level.

 

 

Submitted by PerryChase on September 26, 2006 - 9:30pm.

Well said LookoutBelow. Of the 1.46 million loans are risk, many none will default, maybe all will default; we just don't know. I beleive it's a worthwhile exercise to see what would happen if all defaulted.

Submitted by sdcellar on September 26, 2006 - 9:42pm.

I like all you guys, but that would not be a worthwhile exercise.

Submitted by Colombo on September 26, 2006 - 9:56pm.

I agree that PowaySeller has some great posts here. So what if her predictions prove not to be correct? That does not make the posts any less informative or entertaining.

So what if she conflates her opinions with guaranteed results? If you can distinguish the two, then you shouldn't be troubled by them.

Keep those posts coming!

Submitted by Nancy_s soothsayer on September 26, 2006 - 11:34pm.

I, for one, am very thankful of PowaySeller's posts. I mirror the sentiments expressed by Colombo. Sometimes I entertain the idea that if only Powayseller were a woman posting under a man's name (like Brock or Butch or Robert), she probably would not get so much ad hominem arguments and flak. Agressiveness, bluntness and such - these probably would not come into the equation if she were "Rambo" instead because, IMHO, males can be excused easily for showing blatant agressiveness. Am I being sexist? OhmyGoat! I did not intend to go this road... Please excuse me for bringing it up. I need to go to sleep now!!!

Submitted by powayseller on September 27, 2006 - 8:24am.

From the article:
"The more precariously positioned ARM borrowers are very much on the minds of economists, some of whom fear that masses of consumers will not be able to afford the new higher payments, setting off a recession. According to Christopher Cagan, an analyst with First American Real Estate Solutions, a housing consultancy in Santa Ana, Calif., about 19 percent of the 7.7 million ARM's taken out in 2004 and 2005 are at risk of defaulting."

I did not change my statement, because I still think it is correct. After reading North County Jim's comments, I read that paragraph a second time, and it still sounded to me like Cagan was expecting these loans to default. How else would we get the "masses of consumers [who] will not be able to afford the new higher payments, setting off a recession risk"?

Yesterday's rent thread was very impressive in the high standards the posters set for themselves. The impeccable logic used by all sides made the post a pleasure to read, and I learned a lot from it.

Submitted by powayseller on September 27, 2006 - 8:13am.

woodrow, I appreciate dissent, and I love a good debate. However, these types of comments are personal and not about the loans at all: " extremely biased PS is in her analysis, "her credibility is questionable at best", " you're great when you're not spinning!" So yeah, that sounds a little rude.

sduuude, you are right about the forecasts. Like Roubini, I take existing data to make my analysis. A forecaster takes the data that is out there already, and knows how to craft it into a sensible story. If you read the "bubble bloggers" on the right, you see that they all take existing data and stories, and use it to craft their own analysis. Just to clarify, are you holding me to a higher standard than Nouriel Roubini or Barry Ritholtz?

North County Jim is a model for how to disagree. He often disagrees with me, and he is a perfect gentleman, because he uses logic, so he doesn't need to let his emotions control him. I really respect people like him, and he exemplifies how we should all behave.

Submitted by woodrow on September 27, 2006 - 10:22am.

PS - Forgive my rudeness.  Perhaps my language was a bit hostile and that led to your hypersensitivity.  That being said, you are not beyond reproach, and deserve to be called out when you mislead, just like everyone else.  You title was misleading, and evidence of your bias.  Twisting the quote was unnecessary; it was bearish enough without your spin.

Example:  There are ~ 125k US soldiers in Iraq, and no one would question that they are at risk of dying each and every day due to their physical presence in the most dangerous area on earth.  Does that mean that we expect all 125k US soldiers to die?  

Example:   I have 50k in stocks that are at risk of being lost every day.  Does that mean that I expect to lose the entire 50k each day the market opens?

Again, I apologize if you took my comments personally, and I will tone down the rhetoric when replying to your posts in the future now that I am aware of your sensitivity.  But until you demonstrate that you understand the difference between the concepts of at risk and expected, your credibility is greatly diminished in my eyes.  Risk and expectation are fundamental terms that are extremely important when discussing economics, which is why Jim, sduuuude, and I all took your blunder seriously.  They are not synonymous and can not be used interchangedly. 

 

Submitted by sdrebear on September 27, 2006 - 11:28am.

From Webster’s (you almost knew this was coming, right?):

expect

transitive verb
1 archaic : AWAIT
2 : to anticipate or look forward to the coming or occurrence of <we expect them any minute now> <expected a telephone call>
3 : SUPPOSE, THINK
4 a : to consider probable or certain {my emphasis} <expect to be forgiven> <expect that things will improve> b : to consider reasonable, due, or necessary <expected hard work from the students> c : to consider bound in duty or obligated <they expect you to pay your bills>

 

To say something is "expected" does NOT imply that it is "guaranteed". What it does do is to alternatively convey the message that (in this case) a percentage of loans "are at risk". Expectations do not always come true (as all risk is not warranted).

For example:
I expect to be stopped by 3 traffic lights on my way home as there are ten lights and all the data I have tells me that I get stopped at about 30% of lights. Will that happen? Who knows? But, I'm predicting that I'm "at risk" of being stopped at 3 lights. (Or, I could say that I expect to be stopped at 3 lights.)

I believe the "highlights" have been largely on the wrong terms. Here are a couple different ways the analysis' sentence could have been written. What changes in your mind when the highlighted words are changed? Is there a certain amount of increased "expectation" with the first?

"...about 19 percent of the 7.7 million ARM's taken out in 2004 and 2005 are at risk of defaulting."

"...about 19 percent of the 7.7 million ARM's taken out in 2004 and 2005 might be at risk of defaulting."

Both convey "risk" with very different levels of certainty.

If this analysis did not "expect" these loans to default, then he in turn would not consider them to be "at risk". What PS used here is called an "inference". Apparently not as effective (in this case) as a direct quote, but certainly easily deciphered and not worth this much effort to attack someone's whole motivation and credibility.

Interesting analogy with Iraq and the troops. However, not entirely accurate, nor complete. No, we don't expect all the troops to die (even though theoretically, they are all at some level of risk. However we do expect some of the troops to die (I'd bet there's even a percentage floating out there somewhere), which is the true use of a measure of "risk". That "some" is what an analysis "expects".  Similarly, every loan is at some "risk" of default, but we don't expect all of them to default, do we? No, only 19% of them apparently in this case.

So, I'd be inclined to say that the analysis is more at fault here for using "risk" as a term to define what he actually "expects" in loan defaults, as "risk" can be attributed to all loans, not just 19% of them (there are varying degrees of course which is the real issue here and why an inference for the stated "19% of loans are at risk" is appropriate). Poway Seller is actually MORE accurate in asserting that this analysis "expects" 19% of these loans to fail.

Submitted by woodrow on September 27, 2006 - 11:41am.

sdbear - I disagree.  If the analyst credited with this quote "expected" 1.46M loans to default, I suspect he would have used that term.  He did not, and instead used the term "at risk".

19% of these loans will not default.  We all know that.  To spin an analyst's quote from "at risk" to "expected" is a dramatic and substantive change.  PS may very well have inferred that the author of the quote meant "expected", but that is an incorrect comprehension of the quote in question, in my opinion, and obviously in the opinion of others.

 

Submitted by sdrebear on September 27, 2006 - 12:24pm.

Whoops. We all "know" that? What happens if 30% default? Are you saying that nothing could happen in this country to force 19% (or more) of those loans to default? People say PS makes absolute predictions of the future. What was that?

You said that all soldiers are at risk, but we do not "expect" them all to die. But some will. It would be accurate to say that that percentage (some) is truly "at risk" of dying. That is an "expectation", but certainly not an absolute (either direction, more/less).

The exact same thing was done in this case for loans. All of them are at some level of "risk", but we do not "expect" them all to default. There is an expectation that some will. The assertion is that that a percentage (some) is truly "at risk" of default. Again, this is an "expectation" made by the analysis.

Explain to me how you look at all loans, see some you DON'T "expect" to default, and then put them "at risk".

I agree that the heading is better served with a direct quote, but what she used does not actually alter the real intent of the analysis' findings. I just felt that the seemingly overly enthusiastic criticism on this issue appeared more personal than it probably should have been. I too have seen PS write some things I don't agree with (I literally cringe at some of the racial stuff), but on this particular issue, I think it's being blown way out of proportion. I know it's an accumulation of other things, but pick a better battle than this one. This just seems petty to me.

As with you, it's just my opinion though, so feel free to disagree.

Submitted by lamoneyguy on September 27, 2006 - 1:11pm.

sdrebear,
I disagree. Expectations and risk are completely different terms, especially when applied to economic/financial analysis.

If you have an investment with a 75% chance of yielding a 10% return, and a 25% chance of yielding a -10% return, your expected return is 5%. You are at risk of losing 10%.

In your street light example, you are at risk of being stopped at 10 lights. Your only expect to get stopped at 3 of them.

From Dictionary.com:

risk  /rɪsk/
–noun
1. exposure to the chance of injury or loss; a hazard or dangerous chance: It's not worth the risk.

You are exposed to 10 lights, not 3.

~lamoneyguy

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