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My Worst Charts of 2020

Last week I shared with you some of my Best Charts of 2020. My charts and calls that worked really well in either building the picture or presenting a specific idea.


Of course, it wouldn’t be complete without a look at some of the charts that *didn’t* work (or shall we say the ones that worked “less well!”).


As noted in my previous article, I think it's good to review what worked well - I believe in learning from success. But naturally it's also good to review what didn't work, to see if we can improve processes, thinking, and to make sure we stay humble.

Hope you find these interesting and informative...


n.b. I have updated them with the latest data (in a few cases the original idea has actually come entirely full-circle). Also on formatting: the italic text is a quote from the report in which the chart originally appeared.

1. Global Monetary Policy vs PMI: This was one of my most famous charts of the previous year: it was one of a number of reasons I left 2019 with a bullish view on global growth... And then Covid happened. The global manufacturing PMI resolutely fell off the page. Ultimately it did snap back as monetary stimulus was added and sentiment recovered.


“and here’s everyone’s favourite global monetary policy stimulus indicator. The policy pivot was a key theme of last year where central banks made a resolute pivot from tightening to easing, and we’ve seen the global manufacturing PMI begin to turn as a result” (17 Jan 2020)


The lesson: things change - you can be right and then end up wrong (but then also you can be right, then wrong, but ultimately right...)


global pmi vs monetary policy chart

2. EM Manufacturing PMI: Again with the PMIs, we initially saw the start of what looked like a promising turn upwards at the turn of the year.


“It’s interesting to note how the Asia weighted average manufacturing PMI has turned up quite decisively (while the EM ex Asia version has dropped) there is a tendency for Asia to lead EM ex Asia, which makes sense given much of the Asian economies are at the leading edge of the global economic cycle” (17 Jan 2020)


The lesson: extrapolating existing trends can work, until a tail risk interferes.


chart of EM asia pmi

3. EMFX Market Breadth: Another one from simpler times: pre-Covid it looked like EMFX was gearing up for a rally. It had put in a bullish breadth divergence signal (usually a good turning point indicator), and valuations were on the cheap side. As I noted, I was also sitting bullish on emerging market equities and bearish US dollar, so it all looked coherent and consistent, but then sometimes you can end up being right on the analysis but ultimately proven wrong by an unforecastable external shock.


“EMFX market breadth has rebounded and a bullish divergence pattern is in play” (17 Jan 2020)