Tuesday, November 27, 2012

News you can use?

One aspect of the web that I love is stumbling across interesting articles.  Last week I found Avoid News from www.dobelli.com.  The article was critical of the quality and usefulness of news.  I was an equity analyst for many years and news was critical to understanding the daily gyrations and future fortunes of stocks.  Thinking back, I probably read the news with critical eye towards the validity and bias of the information.  For people who are not in a news-intensive business like research, maybe news is not as necessary as you thin.  Consider the following points from the article:
  • News tends to focus on flashy stories and ignore the more subtle information.  As a result, the stories highlight the outcome (i.e., car crash, crime, etc.) and ignore the background and circumstances that lead to the event.
  • Why pay attention to the news?  It is increasingly entertaining to compete with other leisure activities.  What is the last news story that affected your life?  It is interesting to note that news is a bit of a dependency for some.  If you miss a story, then you may be at some sort of competitive disadvantage at your job, or you may sound uneducated in your personal life. 
  • The news focuses on what is new and not necessarily what is relevant.  Relevancy is personal and it is more productive to seek out information from the web - especially with several different viewpoints on the same subject. 
  • New organizations are not infallible.  Sometimes the information in stories is inaccurate.   Digging for useful information takes research skills and takes time.  It is less expensive to produce stories about superficial events.  The article muses that if news were actually important, then journalists would be among the best compensated workers.
  • I'm not sure about this claim by the article, but it is plausible.  "News constantly triggers the limbic system.  Panicky stories spur the release of cascades of glucocordicoid (cortisol).  This deregulates the immune system and inhibits the release of growth hormones."
  • News shapes our view of the world.  "Our brains systematically filters out evidence that contradicts our preconceptions in favor of evidence that confirms our beliefs (confirmation bias).  Our brains crave the "makes sense" story.  This is why teaching with conflicting viewpoints is a powerful tool.  This is particularly true with news about the stock markets.  When there is a major upward or downward movement, the news reports the reason with a definitive and simple cause.  After years as an equity analyst, I can confirm that the news always gets it wrong.  Want proof?  Consider that the equity markets are extremely complex and dynamic.  Even with smart people in finance and cheap, abundant computing power, nobody has been able to accurately model the equity markets historically - much less forecast them. 
  • "Thinking requires concentration and concentration requires uninterrupted time."  Building up concentration while reading take at least 10-minutes.  The garden-variety news story lasts well under one minute.  Stick to news "magazines" (CBS Sunday Morning, NPR, etc.), which devote more time to stories.
  • Skimming retrains the brain, just like any other cognitive activity that is repeated.  The more short news segments you listen to or brief news stories you read, the better your brain becomes at shallow attention (vs deep thought).  This is particularly true of webpages, where research shows that  "comprehension declines as the number of hyperlinks in a document increases."  This is because your brain must continually be vigilant to not click on the links.  This will become increasingly difficult if you train your brain to prefer brief snippets of news.  In the words of Professor Michael Merzenich (University of California, San Francisco), a pioneer in the field of neuroplasticity, "We are training our brains to pay attention to crap."
  • It takes time to "keep up with the news".  I agree with this article in that news is not very worthwhile.  It is of even less value when you consider that people probably spend about one-half hour digesting news on a daily basis.  Since I left Wall Street, I don't watch the news or read a newspaper.  The exception is Sundays, when I read several papers (e.g., my local town paper, The New York Times, and The New York Post).
  • Is it really news?  "Many reporters cobble together the rest of the news from other people's reports, common knowledge, shallow thinking and whatever journalists can find on the Internet.  My estimates: fewer than 10% of the news stores are original.  less than 1% are truly investigative."  I believe this.  Try flipping around the major networks when the news is on.  It's like listening to a bunch of Top-40 radio stations - the same songs in slightl different orders. 
  • Aside from being of questionable value, news is a business and subject to manipulation.  "The public relations (PR) industry is as large as the news reporting industry."  Brands take billions of dollars to build and maintain.  Businesses will not risk bad PR affecting sales.  Brands have created mass appeal and they cannot risk alienating any demographic segment, that might lead to the finacial pain of a disappointment on Wall Street.  "Take the Nurse Nayirah story.  Nayirah was a 1-year-old Kuwaiti girl who testified to the U.S. Congress during the run up to the 1991 Gulf War.  She alleged that she had witnessed the murger of infant children by Iraqi soldiers in Kuwait.  Virtually every media outlet covered the story.  The U.S. public was outraged, which in turn pushed Congress closer to approving the war.  Her testimony, which all media outlets regarded as credible at the time, has since come to be regarded as wartime propoganda."  It seems like news outlets cover stories for fear of losing some competitive edge.  In addition, they seem to value speeding "news" to market more than accuracy or relevancy. 
  • "News makes us passive.  News stories are overwhelmingly about things you cannot influece.  This sets readers up to have a  fatalistic outlook on the world.  If the human brain encounters a barrage of ambiguous information without being able to act upon that information, it can react with passivity and a sense of victimhood.  The scientific term is learned helplessness."

Sources
image from http://realtrends.com/