Consumers of media: You are doing it all wrong.
Since the election, your personal filter bubble has been a big topic of conversation. Media sources consumed by both the coastal elite and fly-over-country Americans were each shown to suffer from full-blown confirmation bias, with some selective perception and retention thrown in for good measure.
To solve this bias problem, Wired magazine suggests using tech to re-engineer your media diet. You can try an app called Discors or the Chrome browser extension EscapeYourBubble to help you better understand and accept others. They also recommend some podcasts listening: the Ricochet network for liberals and “Keepin’ it 1600” for conservatives.
These well-intentioned suggestions at counter-balancing are fine, but miss the point. Bias is but one of many forms of cognitive error that investors make.
Investors who are consumers of news — and if you are reading this, that means you — should be more circumspect when it comes to their media diets. The post-election emphasis on left versus right is the wrong focus, a remnant of this odd political year. People who risk capital in the markets should instead be thinking about things such as useful versus time-wasting, insightful versus filler, signal versus noise, quality versus quantity.
Note that I am not referring to “alternative facts,” or other such fictions. Instead, I refer to the quality of what you are reading. It is far too glib to say that experts know nothing or that everything on the internet is wrong. If only we could ignore the experts, and assume there is no nuance in the world.
Instead, investors should be more assertive in managing their media consumption. Here are three simple steps that will help you re-engineer your media diet:
No. 1 Create your own media research team: Years of consuming a wide variety of media sources to build my daily reads has allowed me to create my own personal team. There is a list of people in both finance and media I consume assiduously: In the financial realm, this includes Howard Marks (Oaktree Capital), Michael Mauboussin (Credit Suisse), Jeremy Grantham and James Montier (GMO) and Morgan Housel (Colloborative Fund). Media folk include Dan Gross (Strategy & Business), Jesse Eisinger (Pro Publica), Mike Santoli (CNBC) Bill McBride (Calculated Risk), Jason Zweig (Wall Street Journal) and Lisa Abramowicz (Bloomberg Gadfly). This is merely the tip of the iceberg.
These folks have all demonstrated insight, smarts and good judgment; they have put together an enviable track record of being right a lot more than they are wrong. You can create your own research team by finding people whose analytical approach and perspectives add value.
No. 2 Cull the herd: The first step is to cut out the junk food in your media diet. Use your browser history to see what you spend the most bandwidth on, and curate viciously. Bias is easy to spot and remove; the harder thing is the sources that have demonstrated poor judgment, or have amassed a bad track record, or are always yellingabout this or that. They should all be removed. Keep the intelligent, thoughtful sources that are reliable and add value. If you are like most web surfers, you consume endless amounts of weak, unverified junk. When in doubt, take it out.
No. 3 Use Twitter more intelligently: I had a conversation with a digital evangelist at a major software company. We discussed how astonishingly underutilized Twitter is as a “personal learning network.” Having the ability to follow many of the world’s experts in subjects of interest is an enviable luxury unimaginable a mere decade ago.
I have created several lists on topics of interest to give me fast access to world-renowned thinkers who share their expertise in economics, behavioral finance, science and technology, and markets, to cite just a few examples.
There is a cost of paying attention to various things, whether news, research reports or Facebook postings. You should re-engineer your media diet, and be aware that it may not be just your technology that needs a revamp, but also your psychology.
Originally: Try Breaking Your Media Filter Bubble