Data Is Usually Meaningless

When data fails, what should you do?

People tend to make better decisions when their raw material looks like information and knowledge combined with reasoning to form wisdom.


That’s the end game. It a decision that’s based on information and knowledge from the world around us that connects to our particular context and intentions. It’s a mixing. Usually it is a connection of an external tactic or technique to our visions and strategic purpose.

Tax plans usually operate at that intersection. We know what we want and we know what we can use to get the answer. The external information and knowledge is usually brought to us by someone who knows how. As we meld the two, both the specific plan proposed and the specific want tend to change a little. Usually for cost efficiency or the avoidance of risk.

Clients who understand the idea of joining the world to their ideas do better. Most wise plans are flexible. Flexibility is a risk avoidance issue or it prepares for an alternate external context.

Information and Knowledge

Information and knowledge are the keys to sound tactics. Tactics are the methods that apply to turn your resources into the answer to some “What I want” question.

Client generally have only very fuzzy ideas about either of these. There is a good reason for that. Knowledge is a complex thing and most people have no reason to know anything about how it is structured, how it changes, or what techniques there are to optimize a given position. It is enough if the client knows what situation need more in depth effort. Years ago I taught a tax course for the Bar Association. One of the things I learned, you always learn when you teach, is that it is harder to teach answers than questions.

You know that. If you give someone a technique for any particular problem, it won’t be long until it is made to fit some other situation where it should not be used. When your only tool is  hammer, all situations look like nails. The best way for a client is to know a little about situations and questions. The warning flags.

Taking money from a corporation, bringing in new shareholders – especially family members, changing residence, selling the business, starting a succession lan or estate plan, doing a will. All can have optional ways to make the event happen. Some work better than others. If you are adept at knowing there is a problem or opportunity, you don’t need know how, you need know who.

The practitioner will see knowledge to be a large, interconnected set of rules, rulings, exceptions, and case law. The information is that which changes from time to time. Rates, incentives, and special structures. It usually fits with the structure, but not always.


The least reliable variable people run into is “Data.” People can use information as part of thed ecision making stage,  but not data. Data must be cleaned up before it becomes information. Data is usually not good enough to base decisions on.

You must know if it is reliable. How was it collected? Was it all collected? Was some scrubbed because it didn’t fit? How was it organized for presentation? Why that way? Back in the Spring, spent quite a lot of time digging through Covid data. It was nearly useless.

While some jurisdictions tried others were opaque. Where the raw data was timely, organized, and at least a little complete, you could make inferences. Ontario was not terrible. You could see the age effect clearly and the tragedies that occurred when too little care was taken to protect the vulnerable. There were a few long term care facilities that lost half their patients. There were others who lost fewer than 5%. That was obvious from the data available after 60 days. The death rate for people under 70 was low enough that some of the policies made little sense. Why shut down commerce when the probability of someone of working age being seriously affected was very low?

As time passed the data became worse. Test results and vaccination became big issues, but the rate of infection and the death count became more obscure. Most of the data became suspect because it was used to address political agendas. Does anyone yet know what a Covid death means exactly. Does it mean caused by covid, or covid was present along with other issues when the patient died. Does anyone have a good idea about the vaccinated case count and death, or the number of serious side effects from vaccines. Even when bits of that data are available it is chaotic.

For a while I felt troubled that I was cynical. I have now decided that any data I find, whether form India, Israel, Sweden, Gibraltar, The United States or my hometown is not more than 10% reliable. Probably less. It has failed to pass into the information space even though it is presented as useful by the government and their agencies and the media.

Investment data by comparison is better. If you lie  or misrepresent  the financial situation of your publicly traded company you go to jail. Investors seek out contrarian opinion. Taking the consensus opinion as fact is almost never done. You can make a good living as a fund manager if all you ask is, “What else is there to know that disagrees with this?” I have never thought about how good investment data is in general, but I might be willing to believe that things like crop projections, investor sentiment, the growth rate in an industry, or a state, or the future estimated tax revenue, were 30% useful.

It could be just me. I am a contrarian by nature.

The takeaway

Don’t assign meaning to data. Information is useful, but in short supply.

Don’t overlook data either. If you have enough pieces, you can sometimes solve the puzzle a little earlier than others.

Understand your own situation and what you want to achieve in great detail. Especially the priorities.

Delegate the tactical solution seeking and implementation, but retain the final decision. Advisor must be able to show how their plan fits your strategic purpose.

Never start with how you should do something. You will have too little purpose to attach to. Anything might be right when direction is missing.

Cynicism is uncomfortable, but when you don’t trust the data it is as close as you can come to wisdom.

Help me please. If you have found this useful, please subscribe and forward it to others.

I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email to

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