Correlation, Causality and Cockroaches

In his recent letter to shareholders of Berkshire Hathaway, Warren Buffet said that

"In the world of business, bad news often surfaces serially: You see a cockroach in you kitchen; as the days go by, you meet his relatives."

Quite apart from the unfortunate use of a cockroach analogy when talking about a food retailer, I wonder about the point that Mr Buffet was trying to make. He appears to provide a causality link by saying

"The company's market share fell, its margins contacted and accounting problems surfaced."

There is of course a temptation to think that because one thing follows another that the first is the cause of the second - a fallacy otherwise known as 'post hoc ergo propter hoc'.

But there is a significant difference between correlation and causality.

It seems to me that there is a significant correlation here, but not necessarily causality; for that we may well be better looking at something else that Mr Buffet said

"In 2013, I soured somewhat on the company's then-management...."

and that may be the real lesson here.