How Can We Better Read The News?
Imagine you’re a journalist, you go up to your boss one day and say, “There is nothing important to write about today, let’s talk about nothing.” Your boss points at you and says, “Good one! HAHAHA” The truth is there are some days where nothing significant has happened. However, the need to write far exceeds the number of things that need to be written. Your job is on the line, and it doesn’t help that we’re all connected online too. It simply means when you’re forced to talk 24/7, there will be moments when you need to make stuff up. It is not false information, but information vague enough to lean into what we want to hear, not what we need to hear.
Affirmation sells much better than information. Who wants to hear the truth when we can hear that we’re right?
We don’t want to hear that we’re doing better in the long run. We want to hear that we’re suffering right now. This way, we can relate to its recency and familiarity. We live in a world with insane rising productivity. Computers complete tasks in seconds what used to take weeks. We get to have an item shipped halfway across the globe delivered to us in mere days. We used to wash our clothes by hands, and washing machines do that for us now. Meetings no longer need to be physical and can mostly be done via Zoom. Collectively, we’ve managed to squeeze out a few more hours of leisure time of an average day, but hardly anyone cares. Soon, our kids will be sitting in his or her self-driving car lamenting how awful the world is. Extraordinary progress has been made over decades, but there is nothing much to rave about living conditions improving year to year. It isn’t exciting, so we obsess over trivial news that happens all day long.
While we’re living longer, it seems we’re thinking shorter. Our attention spans appear to have contracted.
Media feeding frenzies are common, as our minds favour the familiar over the true. An excellent way for a media organisation to leverage on good news results is to piggyback on others’ success. Find something working well in foreign news media? Tweak it towards local tastes and the news can easily be replicated at home. Reporting of the news is not wrong, but we need to bear in mind that it is mostly incomplete and subject to revision. We all want the most important stories to be covered, but media outlets need to publish enough stories to pay the bills. In order to fill time in a 24-hour news cycle, the news media become fundamental propagators of speculative price movements to make news interesting to their audience. It is in their interest to blow trivial headlines out of proportion. “Bitcoin (BTC) price plunges to $30,000, hits lowest level since..” isn’t a call-to-action for us to do anything. Sure, it is staggering and gains attention. More importantly, it reaffirms the perspectives of many 50–70 year old, who have gone through the dot.com boom and 2008 economic crisis, laughing at how Crypto is a bubble.
What the news media did not say and probably will not say is that — things got better, slowly for blockchain over the last five years. The daily volatility of Crypto’s price action is driven more by word-of-mouth than the gradual incremental progression of the technology.
The way we approach news is very much similar to the way we approach penalty kicks in soccer. We’re excited on who is kicking the ball. We love to guess where he is kicking the ball to. We want to know if the goalkeeper can predict where the ball is flying towards. We make a bet that he’ll kick the ball to the top right corner with a perfect spin and the goalkeeper will foolishly leap to the left. We speculate and we pray. He finally kicks the ball. The ball waltz its way to the middle and into the palms of the goalkeeper. Anti-climatic as hell. Boring piece of shit. Yet, statistics have shown time after time that kicking the ball straight down the middle is likely to give the best results. The kicker made the correct choice, but it is not the news or outcome that we want.
It doesn’t coincide with our worldview, because “Anyone could have caught that, I could have caught that. I just needed to stand there and welcome the ball in my embrace.”
As a result, we increasingly get the news that we want. It is fun, scary sometimes, but it should almost never affect our investment decisions. We’re under no obligation to take financial news seriously. Positive news is hardly reported, because improvement happens too slowly for anyone to notice. On the flip side, negative news is not shy or subtle. It hits instantly, so fast that it overwhelms our attention. We simply can’t look away. One way to approach this is to keep in mind that progress takes time, but pullbacks happen instantly. News lasts for 24 hours, emotions last for 90 seconds and our assets lasts for years.
