My first full-time portfolio management job was with CREF. I started out with a portfolio of Australia/New Zealand stocks and after about six months added Hong Kong and smaller Asian market portfolios to that.

The woman I reported to managed the Japan portfolio, which in the mid-1980s dwarfed the rest of the international investing scene. Mai was a hard taskmaster but she trained me very well in how to see the bigger picture behind the ebb and flow of individual stock prices. Every morning there was a market quiz in her office. She would name a stock. I had to tell her: the closing price, the price change from the previous day, the trading volume, the brokers involved in both sides of the trade, how this compared with other stocks in the same industry–and what I thought the significance of the move was.

Early in my second year, she told me she was planning to leave the company. I asked her to let me help with the Japanese portfolio, so I might have a chance to succeed her. She said no. I left.

My next job was the turnaround of a small global portfolio which had had dreadful performance for a number of years and consequently was experiencing constant, substantial redemptions. My new desk contained about eight bottles of Pepto-Bismol and piles of stock charts.

The charts struck me as kind of weird visually. After a short while, I realized that my predecessor had depended heavily–exclusively?–on charts. He also liked stocks that had made horrible plunges but which appeared to be stabilizing. So brokers, being brokers, gave him what he was interested in. They manipulated the X and Y axes of the charts so they “showed” what he wanted to see–a steep plunge (stretch out the Y axis/shrink the X axis) followed by calmer waters.

Sounds kind of stupid, but this is rule #1 for charts–make sure you understand what the units of measurement for the axes are, and whether they’re linear or logarithmic.