Those of us with long memories of the Australian business scene may remember when BHP blew a cool billion dollars on the purchase of Magma Copper. A friend of mine who worked for BHP in the 1990's related this story to me.
The Chairman (I think) was in his last year at the helm, was sitting on a huge pile of cash, and wanted to splash it around on a big deal in order to cement his name as a giant of the Australian business scene. He settled on Magma Copper as the object of his affection.
A young Business Analyst was called in to run the slide rule over the books and evaluate Magma as a possible purchase.
The young Business Analyst did just that, and reported back a few days later that the company was a dog, and should not be touched.
The Chairman sent him away to have a second look at the books.
The YBA did a more thorough investigation, and came back a week later to say that it was still a dog.
The Chairman sat him down and told him the following: "Look son, you don't get it. I want to buy this company. If you can't make the numbers add up, I'll find someone else that can".
The analyst, fearing for his job, returned a few days later with a glowing report.
BHP went on to blow a billion dollars, and the Chairman failed to make it into the pantheon of visionary Australian business leaders.
That story, which is all about ignoring data that doesn't fit your narrative, came back to me after reading these two papers (via Andrew Bolt) this morning.
I saw this sort of thing occur all the time at the government agency that I worked for some years ago - selective use of data happens all the time, but in this case, the consequences are way too serious for all of us to ignore the fact that it is skewing our perception of how the climate works.
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