Many years ago, when I was a poor and humble graduate student, I taught the prep course for students taking the GMATs and LSATs. I understood the internal logic and game theory needed to succeed on standardized tests, and could explain techniques used to do well on them.
One of the keys to succeeding on these tests was to have strong reading comprehension skills. Toward that end, I taught what I like to call active reading. It required the reader to approach text in a rigorous and logical way, challenging each sentence to find assumptions, false statements and deductive errors. Think of it as logical skepticism.
I still use these muscles everyday. I can randomly pick up any newspaper article or analyst report, and find holes and flaws merely by asking questions the author left unanswered. Active reading often leads to the conclusion that the vast majority of news is at best incomplete and uninformative, while a majority of research reports are full of biases and logical errors.
That is a pretty bold statement, and to demonstrate this, I am going to take a random article and dissect it using logical skepticism. When I am finished, you will have a better understanding of why I often say “Lose the News.” I hope you never look at media noise in the same way.
Yesterday, an article decided to take stock of investors’ concerns, quoting many strategists and managers. I chose it because it was well-written and researched, and offered the perspectives of many strategists. However, this exercise can be done with any article or research piece written by anyone anywhere.