The world is awash with data and statistics. This is a positive development, but data can be used in strange ways and, as far as investors are concerned, it is important to differentiate between meaningful and questionable statistics.
Facebook, Google and your local store probably know more about you than you would ever imagine.
Target, the huge American discount retailer, has developed a sophisticated software programme that can determine when a woman is pregnant because purchasing data shows that women change their shopping behaviour when this occurs.
The New York Times Magazine tells the story of a man who went to a Target store in Minneapolis and criticised the store manager because his daughter was being bombarded with pregnancy-related coupons.
"She's still in high school and you're sending her coupons for baby clothes and cribs. Are you trying to encourage her to get pregnant?" the man asked.
The manager apologised and called the father a few days later to apologise again.
This time he received a much more subdued response and was told, "It turns out there's been some activities in my house I haven't been completely aware of, she's due in August".
Companies now mask the fact they know women are pregnant by offering other products with their pregnancy-related promotions knowing full well the women have no interest in the additional items.
Investors are often faced with the same dilemma as the Minneapolis father - which information is accurate and which is misleading?
This is particularly relevant now, because investors are keeping a close eye on China because its growth rate is slowing and there are clear signs it has had a credit and property bubble.
On Thursday, Merkit/HSBC revealed that its Chinese purchasing managers' index fell to 48.3 last month from 49.5 in January. A measurement above 50 indicates manufacturing is expanding; below 50 shows it is contracting.
But how can any general private sector statistic accurately measure the overall state of manufacturing in such a vast country?
The same could be said for China's gross domestic product and many of its other economic statistics.
On January 20, China's National Bureau of Statistics announced that the country's GDP grew by 7.7 per cent last year.
This beat the Government's target of 7.5 per cent and the market's consensus of 7.6 per cent.
How could China, with a population 302 times greater than New Zealand and with 36 times more land mass, produce its GDP figures 20 days after year-end while we take about 80 days?
Is China's National Bureau of Statistics on speed - and Statistics New Zealand on a go slow - or are there serious questions about the reliability of China's statistics?
The statistics are clearly questionable - several credible media outlets, including the government-controlled Xinhua News Agency, referring to "a somewhat peculiar math problem".
According to Xinhua the aggregate GDP of 28 provinces was greater than China's total GDP and this did not include three provinces that had not reported their GDP.
Local officials in China are promoted on the basis of their region's growth, and this gives them a huge incentive to report inflated GDP figures.
As well, environmental issues are important and if local officials can show that their region's GDP has grown at a faster rate than coal consumption then they appear to be energy efficient.
Last weekend's Wall Street Journal raised serious questions about the reliability of US unemployment figures.
The paper said the US Government began to measure unemployment during the Great Depression because it had no official way of calculating economic activity or unemployment.
Today, the unemployment rate is based on two monthly surveys, one of 557,000 businesses and the other of 60,000 households.
Unemployment is defined as covering those looking for work but unable to find it, rather than those who don't have a wage-paying job.
To some extent, these surveys are similar to political opinion polls, which can predict a result that is different to the result of a general election held days after the poll was taken.
Economists also say a national unemployment rate is misleading because there is a vast difference between regions, race, gender and education attainment.
The unemployment rate among university-educated women in their 30s in Boston is totally different to the rate for poorly educated African-American males under 25 in Detroit.
Nevertheless sharemarkets often move dramatically when the headline American unemployment figure is announced and economic policies can be based on these headline figures.
The US Federal Reserve Board's monetary policy is strongly influenced by the national unemployment rate and President Obama justified his US$800 billion stimulus bill in 2009 on the national unemployment figure.
In New Zealand, we have one official measurement of unemployment and two others compiled by the Ministry of Social Development.
The official unemployment rate is the Household Labour Force Survey compiled by Statistics New Zealand. The survey, conducted every three months, covers about 15,000 private households and about 30,000 individuals.
It samples "households on a statistically representative basis from areas throughout New Zealand, and obtains information for each member of the household. The sample is stratified by geographic region, urban and rural areas, ethnic density, and socio-economic characteristics."
New Zealand had a seasonally adjusted unemployment rate of 6 per cent for the three months to December - representing 147,000 people - compared with 6.8 per cent a year earlier.
Eleven OECD countries have a lower unemployment rate and 22 have a higher rate.
The latest New Zealand unemployment rates are males 6.9 per cent, females 5.2 per cent, European 4.6 per cent, Maori 12.8 per cent, Pacific peoples 13.7 per cent and Asian 5.8 per cent.
Auckland has a 6.3 per cent unemployment rate, Wellington 6 per cent and Canterbury 3.4 per cent. Canterbury has the country's lowest unemployment rate and Bay of Plenty the highest at 9.3 per cent.
The 15-19 age group has the highest unemployment rate at 24 per cent while the 65 years plus age group the lowest with 1.8 per cent.
The Ministry of Social Development used to issue a statistic called the unemployment benefit. But it has changed this definition to "jobseeker support" and has released estimated figures on jobseeker support back to December 2008.
Comparison of the jobseeker support figure and the official number of unemployed show the difference between these two figures can fluctuate dramatically.
In June last year - the last time we had all three statistics - 48,400 people were receiving unemployment benefits, 128,600 were receiving jobseeker support and 153,000 were officially unemployed.
These figures show there can be a material variation between our unemployment measurements although the official Statistics NZ figures are the most widely used.
There is an old saying: "There are three kinds of lies: lies, damned lies, and statistics."
This column is not trying to say all statistics are lies but some headline figures are questionable and little better than educated estimates.
Because of the vast amount of data disseminated these days it is important for investors to decide which figures are accurate and most likely to give a meaningful indication of overall market movements over the medium term.
• Brian Gaynor is an executive director of Milford Asset Management.