Glossary›Ratio mining
Ratio mining
Ratio mining is the habit of already holding a bullish or bearish view on a and then searching through the many available ratios for the handful that support it, while quietly setting aside the ones that don't. With dozens of ratios available for any company, a favorable number to lead with is almost always findable in either direction, which makes this kind of evidence gathering easy to do without ever noticing it happening.
The discipline that guards against it is deciding in advance which checks actually matter for the decision being made, then looking at the full set before forming a conclusion, rather than searching for support after one is already reached.