I have just realized that I made two horrible and very embarrassing data interpretation mistakes in one of my prior posts. These are the type of mistake about which I have been ruthless with folks like S&P, and the Morgan Stanleys and Goldman Sachs of the world. I now too deserve to be accorded the same treatment, i.e. public flogging on the internet.
Refer to my analysis Rupee Fall: No capital flight, only speculation–II , where I say:
“The foreign exchange (Forex) reserves as of June 15, 2012 were around Rs 16000 Cr, around Rs 2000 Cr higher than a year ago, and Rs 200 Cr more than a week prior. Not only is the Forex situation comfortable; in fact India’s Forex reserves have been on a slow uptrend over the past year.”
Here’s what I should have said:
“The foreign exchange (Forex) reserves as of June 15, 2012 were around $289 Bn, just around $ 20 Bn lower than a year ago, and about $ 2 Bn higher than a week prior. The Forex situation has been fairly stable for the past year, with only minor and ‘routine’ fluctuations”.
The mistake I made was in using the Rupee amount in Forex instead of using the Dollar amount. That’s a very basic kind of error to make. It happened because I was in a rush to post my analysis. The conclusion of my story was that that there is no flight of capital out of India. Though there is no change in this conclusion, nevertheless this kind of error is simply unacceptable.
I then go on to make a second mistake in the same post ! This time around FII numbers.
Here’s what I said
“FII remains long-term bullish based on equity inflows, with massive net inflows of Rs 17,000 Cr so far during 2012. Though there were net outflows in April and May of Rs 900 Cr and Rs 2,200 Cr, respectively, the amounts are minor. In the current month to date, there have been minor net inflows of Rs 1,500 Cr”
Here’s what I should have said :
“ FII remains long-term bullish based on equity inflows, with massive net inflows of around Rs 36,000 Cr so far during 2012. Though there were net outflows in April and May of Rs 1,600 Cr and Rs 3,100Cr, respectively, the amounts are minor. In the current month to date, there have been minor net inflows of around Rs 400 Cr.”
I used the combined FII and DII numbers instead of just the FII numbers. Again, a totally unacceptable kind of mistake.
I pull no punches when I criticize folks like S&P, Morgan Stanley, Fitch, Goldman Sachs and others when they make basic data interpretation errors. I believe that it’s only fair that I too subject myself to getting flogged publicly on the internet, when I make a similar mistake.
What am I planning to do about this going forward? Two things:
I usually do a data audit before posting a story. I have been a bit negligent in that regard in the past few weeks; in future I plan to become more rigorous about this.
I am also considering working with an experienced market analyst who will review my analyses before I post them, so that such issues and other errors are caught well in time.
These types of mistakes are shameful and totally unacceptable and I am deeply embarrassed. I sincerely apologize to my readers and promise that I am going to take the greatest care to ensure that something like this never happens again. I also promise to be ruthless with other market professionals, and even more ruthless with myself, whenever I come across a basic data interpretation issue like this.Related Analyses
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