Years ago I used to be a news junkie. I bought newspapers regularly. I liked to keep up to date with what was going on. Perhaps you did (or still do) too…
Then I stopped. As an investor, trying to find profitable opportunities for readers of my investment advisory, Crisis & Opportunity, I realised that less is more. Too much information clouds your judgement. It’s just noise.
The approach works. In the nearly four years that I have been doing this, the average stock pick in the Crisis & Opportunity portfolio has outperformed the market twice over. That’s including all stocks — winners and losers.
Shutting out noise isn’t the only reason for this outperformance. There is a process involved and consuming less media and opinions is just a part of it. But it’s an important part. As I often tell my readers, it doesn’t matter what you think, it matters what the market thinks.
I’m telling you this not to brag about the numbers, but to let you know how dangerous the power of narrative can be to an investor. When you consume modern day media, you’re consuming a narrative that someone else is imposing on you.
And if you go down a narrative path, you won’t see what’s really happening and can miss important money making opportunities. You don’t see things objectively enough.
Good narratives have an emotional hook. They appeal to the emotional you, not the ‘homo economicus’ you’ll find in economic textbooks. These books tell us that we are all rational thinkers. We’re not.
The mainstream media has worked this out. Actually, they worked it out a long time ago, but now it is far more insidious. They prey on emotion daily, while operating under the guise of telling you the truth.
But whose truth is it? Is truth objective or subjective?
Social Media Can Be Powerful If Used Properly
The latest incarnation of this is social media. These are platforms where people can go and enjoy carefully selected opinions that suit their prevailing biases. Social media can be useful if used properly, but it is often just an echo chamber of similar opinions masquerading as truth.
Yesterday I pointed out how President Trump singled out these new media companies for quashing conservative voices. I told the story of how Facebook board member Peter Thiel moved out of Silicon Valley because of the rabid left wing ideology that pervaded the place (irony, anyone?).
Soon after, this report popped up on the Zerohedge website:
What the?! Seriously?
‘According to a memo posted on Facebook’s internal message board titled “We Have a Problem With Political Diversity”, and which was published by the New York Times, senior Facebook engineer Brian Amerige confirmed Trump’s allegation writing that “we are a political monoculture that’s intolerant of different views” and shockingly admitted that “we claim to welcome all perspectives, but are quick to attack — often in mobs — anyone who presents a view that appears to be in opposition to left-leaning ideology. We throw labels that end in *obe and *ist at each other, attacking each other’s character rather than their ideas.”
‘The scathing indictment of Facebook’s liberal “mono-culture” continues:
‘We do this so consistently that employees are afraid to say anything when they disagree with what’s around them politically. HR has told me that this is not a rare concern, and I’ve personally gotten over a hundred messages to that effect. Your colleagues are afraid because they know that they — not their ideas — will be attacked. They know that all the talk of “openness to different perspectives” does not apply to causes of “social justice,” immigration, “diversity”, and “equality.” On this issues, you can either keep quiet or sacrifice your reputation and career.
‘“These are not fears without cause” Amerige writes, and continues the stunning disclosure of the company’s biased culture, “Because we tear down posters welcoming Trump supporters. We regularly propose removing Thiel from our board because he supported Trump.
Look, I went through a lefty stage at university. But when you get into the real world and see how it works, you realise that the whole redistribution of wealth thing has its limits.
These tech kids (well, adults with the mind of a kid) have grown up in an era of such easy money that the ‘real world’ that you and I know doesn’t exist!
It’s a massive concern.
Social Media Allows Us To Cherry Pick Our Best Moments
When you have the mainstream media setting a narrative, and then the large tech platforms trying to enforce that narrative by shutting down competing voices, you know you’ve arrived in the land of George Orwell.
It’s just harder to see today because social media allows us to cherry pick our best moments. Many people don’t open their doors or their hearts anymore. Rather, they only reveal carefully crafted windows into their lives. Pictures of cappuccinos and smashed avo on toast, and holiday’s in Bali or Europe in the summer are the reality show that a lot of people live these days.
No one wants to see you dragging yourself out of bed to go to work, or a rushed breakfast, an annoying commute, a trashed house from out of control kids, piles of washing, half arsed school lunch boxes, or sitting up too late to get some downtime in before you wash, rinse and repeat.
That’s life. Unsanitised, but beautiful nonetheless.
Embrace it, and disregard the phonies. You’ll be better off.
As an added benefit, doing so can improve your portfolio performance too. I’ve shown this to my subscribers regularly over the past few years. It sounds weird, but trust me, it works.
On that note, I’ve got a new report coming out next week that explores a sector the media simply isn’t talking about right now. There is no popular narrative about it, not yet anyway. This is the perfect set up for what I hope will potentially be big future gains in the years ahead.
Keep an eye out for it.
Editor, Crisis & Opportunity