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In this video, the presenter demonstrates how to add a watermark to a chart in Excel or PowerPoint. The process involves creating the watermark in PowerPoint and saving it as an image to be used as the background of the chart. The example shown involves creating a text box with the word "confidential" formatted in medium gray and rotated 45 degrees. The presenter recommends using medium to darker grays for watermarks and rotating them 45 degrees counterclockwise for a standard appearance. Holding the shift key before grabbing the rotation handle in PowerPoint allows for easy rotation.