The exchange rate between pictures and words is traditionally held to be one to a thousand although, in the case of Charles Minard, a picture – or more specifically a ‘thematic’ or ‘flow map’ – could be worth a lot more.
While hardly a household name, the Frenchman does hold a special place in the hearts of statisticians for the sheer amount of information he was able to include – clearly and comprehensibly – in a single chart.
An early pioneer, then, of what we would nowadays call ‘infographics’, Minard worked as a civil engineer throughout Europe during the 19th Century.
He created his flow maps to inform discussions on dozens of infrastructure projects, ranging from freight traffic on rivers and railways to the import of coal and export of wine – however, it is his chart on an entirely different subject for which he is most well-known.
In 1869, Minard created the distinctly bleak chart below, which illustrates Napoleon’s disastrous campaign in Russia in 1812 and 1813 and the terrible losses the French army suffered along the way. The increasingly thin band shows the size of Napoleon’s army at specific geographic points during their advance (in red) and retreat (in black).
Minard did not stop there, though, and, in addition to Napoleon’s troop numbers, the map also illustrates distance travelled; temperature; latitude and longitude; direction of travel; and location relative to specific dates.
As commentators have since noted, no actual mention is made of Napoleon – Minard’s interest was not in a great figure of history but in the numbers underlying the travails and sacrifices of his soldiers.
What's this got to do with investment?
We would never claim to be addressing such a sweeping and elegiac subject when we are crunching the numbers on potential investments, here on The Value Perspective – nor, indeed, to portray our conclusions so beautifully.
Nevertheless, we do work very hard to set down the detailed results of our research on every company clearly, concisely, objectively and in a set template so it all retains its value for years to come.
The result, as we explain in more detail in Investment edges, is an archive or database of every company we look at, with all the information held in a consistent format – in effect, putting all our analysis in cold storage until such time as we need it again.
Certainly that can help us keep tabs on stocks we own but the real edge this system gives us relates to all the work we have carried out on businesses we did not end up buying.
These are all stocks where we have calculated what we believe to be a fair valuation and therefore a suitably attractive ‘target price’ at which to buy in – and their profiles are waiting in our database should, for whatever reason, a company’s share price happen to drop significantly.
At that point, we can update our research and begin the sort of objective, numbers-based investment discussion of which Minard would hopefully be proud.