NEW YORK (MainStreet) — The Oracle of Omaha can’t do it without visuals. Bud Fox, and Gordon Gekko for that matter, couldn’t do it without them either. Forecasting is impossible without evidence, robust or not—and the visual representation of numbers is as important as the trends they indicate.
Fidelity’s StockCity too is a boon for investors of all stripes, but especially those with a short retirement horizon, which spatializes your stocks as buildings in a cityscape. There’s a free version that lets you tool around your investment empire as if you were browsing a Google Earth map of a city and a virtual reality view (powered by Oculus Rift) that requires a headset. In either case, it empowers the investor to identify opportunities that may be hard to see on a spreadsheet.
By leveraging some of the core principles behind data visualization, StockCity won’t make you a smarter investor, but it will make you a more nimble one and allow you to ask the right questions about your portfolio before making your next move.
“Data visualization is important for the individual investor, because there’s a lot of data you can get out there, but it’s not always packaged in a way that’s easy to understand,” says Joe Leider, an investor, analyst and data visualization expert based in Portland, Ore.
“Data visualization is a way to condense that process of dealing with big tables of data and seeing big trends,” he says, noting that you have to identify the right tool, whether you’re looking at one company’s performance or scaling up to a comparison of 50 or 100 companies over time.
And, even when you’re ten months or ten years away from retirement, the ability to quickly see performance over time across companies in one sector will save you precious time.
“A lot of people use Excel to do simple charts—and it’s a powerful tool for the individual investor, but software like Tableau—my favorite for a while now—is a drag-and-drop interface and lets you filter quickly,” Leider says.
Tableau Software, founded in 2003 is a big fish in the data visualization space, offering accessible and intuitive business analytics tools. On October 12, Deloitte Consulting, which has used Tableau for a while as its front-end visualization tool, announced an alliance with Tableau to beef-up its offerings for enterprise customers.
Wonky tools are one thing, but investing is a big tent that has its own media culture. Sometimes you need to broaden your view of investing to see how political or cultural trends could impact your portfolio. Enter: Bloomberg Visual Data, which has set a high bar over the past few years for editorial-driven infographics.
Staffed by a small team of developers, designers, and journalists, Bloomberg Visual Data’s output of interactive and static infographics for “global business consumers” is consistent—and consistently good: sleek, black backgrounds, accessible graphic treatments and legible typographies, not to mention the frequent use of photography to punch-up engagement on everything from worldwide gas prices, to labor shortages in metro areas, to Canada’s corn belt. Best of all, it’s free on the website.
Whether you’re talking about Tableau or Bloomberg Visual Data, however, the source—or, at least the Bob-Dylan-going-electric-figure—of data visualization is Edward Tufte, who splashed down three decades ago when he published The Visual Display of Quantitative Information in 1984—reportedly by taking out a second mortgage on his home. You wouldn’t know it by the title, but it is not an academic tract. It’s an extended meditation, in plain language, on numbers and how to represent them. Because of that and his three subsequent books, Tutfe is known on both sides of the art/science fence, and the ways in which media outlets in particular deploy approachable, meaningful, and even sexy infographics today—from the offerings from Bloomberg Visual Data, to Wired to Vanity Fair to the Boston Globe—is due in large part to Tufte.
Tufte is squarely his own brand at this point, speaking to packed houses regularly (and usually in outer-borough hotel ballrooms, charging several hundred dollars per person).
When I saw him recently, he opened with Chopin’s “Berceuse, Opus 57” (borrowed from Stephen Malinowski’s Music Animation Machine project), the parts of which had been mapped on the screen as a project management flowchart. The juxtaposition of Chopin and agile sprints garnered chuckles from the audience—and that, for Tufte, is the point.
“The goal, always,” he says, “is to maximize the viewer’s content reasoning time,” and to make sure that people quite simply “get it.”
It sounds simple, but many people struggle—out of inability or boredom with what they’re looking at—to understand visual evidence even as basic as change over time, profit over loss, or even diminishing returns. For Tufte, effective visualization is about interpreting data points to create information, which sounds like an interminably banal thing to say, but it’s the difference between showing someone a line graph and letting them enter what he calls “a luscious landscape.”
It’s about doing more with more, in other words. That landscape? It’s not about dialing back the inputs or number of data sets you wish to compare. It’s about dialing up the inputs. It’s about layering. It’s about commingling perhaps incongruous data sets and creating a synthesis.
“The best test of all is how much we can get away with in a rich visual environment,” he says—and the degree to which you can captivate the viewer is also the degree to which you’ve achieved what he calls “a success in the wild.”
Leider agrees with the more-equals-more approach.
“Whenever possible, try to show more data,” and—importantly—understand what you’re working with. “Show your sources as often as possible and choose the right visual for the job,” he says. “If you’re looking at comparing shares, never use a pie chart. Use a bar chart, because the quality of the answer you get will always depend on the quality of the question you’re asking.”