Today’s topic is “the news.” Specifically, how consuming it can turn your brain into soft cheese and make you a lousy thinker and investor.
I think the message here is important — and potentially life-changing. Does it sound like I am exaggerating? Hang in there and keep reading. You tell me what you think after you’ve read what I’ve got here.
The impetus for this is an essay by Rolf Dobelli, a Swiss entrepreneur, titled “Avoid News.” Dobelli makes the case that news makes us distracted, wastes time, kills deeper thinking, fills us with anxiety and is toxic to our mental health. His analogy: “News is to the mind what sugar is to the body.”
I shared the essay with my wife Carol after I read it. It made an impact. Carol offered to cancel her electronic subscription to The New York Times if I would cancel my print subscriptions to The Wall Street Journal and The Financial Times. (We already ditched The Washington Post. I got tired of contributing to the salaries of Steven Pearlstein and Ezra Klein, who must be the worst writers on economics in America still getting paychecks.) Neither of us watches TV news.
I had to think about this offer. I love reading the newspapers every morning over breakfast and tea. I also passed on the letter to a buddy of mine who is in the business of advising institutional clients where to put their money. Dobelli had him convinced too, and the next day, he told me he left his WSJ and FT unread.
So what is Dobelli saying? Let me hit some high points.
Dobelli’s analogy with food is a good one. We know if you eat too much junk food, it makes us fat and can cause us all kinds of health problems. Dobelli makes a good case that the mind works the same way. News is brightly colored candy for the mind.
News is systematically misleading, reporting on the highly visible and ignoring the subtle and deeper stories. It is made to grab our attention, not report on the world. And thus, it gives us a false sense of how the world works, masking the truer probabilities of events.
News is mostly irrelevant. Dobelli says to think about the roughly 10,000 news stories you’ve read or heard over the past year. How many helped you make a better decision about something affecting your life? This one hit home.
Last year, I wrote 58 emails to my subscribers under the Capital & Crisis banner. I looked back and counted only five in which a news story was front and center. Even then, I used the news more to make what I was saying seem relevant and timely. But I could’ve excised the news and nothing would’ve been lost.
We get swamped with news, but it is harder to filter out what is relevant — which gets me to another point that hit home. Dobelli talks about the feeling of “missing something.” When traveling, I sometimes have this feeling. But as he says, if something really important happened, you’d hear about it from your friends, family, neighbors and/or co-workers. They also serve as your filter. They won’t tell you about the latest antics of Charlie Sheen because they know you won’t care.
Further, news is not important, but the threads that link stories and give understanding are. Dobelli makes the case that “reading news to understand the world is worse than not reading anything.” In markets, I find this is true. The mainstream press has little understanding of how markets work. They constantly report on trivia and make links where none exist for the sake of a story, or just for the sake of having something that “makes sense.”
In markets, reporters try to explain the market every day. “The market falls on Greek news” is an example. Better to not read anything if you’re going to take this kind of play-by-play seriously at all.
The fact is we don’t know why lots of things happen. We can’t know for sure why, exactly, things unfolded just as they did when they did. As Dobelli writes, “We don’t know why the stock market moves as it moves. Too many factors go into such shifts. Any journalist who writes, ‘The market moved because of X’… is an idiot.”
You contaminate your thinking if you accept the neat packages news provides for why things happen. And Dobelli has all kinds of good stuff about how consuming news makes you a shallow thinker and actually alters the structure of your brain — for the worse.
News is also costly. As Dobelli points out, even checking the news for 15 minutes three times a day adds up to more than five hours a week. For what? He uses the example of the Mumbai terror attacks in 2008. If a billion people spent one hour of their attention on the tragedy by either reading about it in the news or watching it, you’re talking about 1 billion hours. That’s more than 100,000 years. Using the global life expectancy of 66 years means the news consumed nearly 2,000 lives!
Pretty wild, right?
So what to do? Dobelli recommends swearing off newspapers, TV news and websites that provide news. Delete the news apps from your iPhone. No news feeds to your inbox. Instead, read long-form journalism and books. Dobelli likes magazines like Science and The New Yorker, for instance.
As an investor, I’d add some of mine own:
My fundamental problem with the news is that it makes it seem as if important things happen every day. The vast majority of the time, nothing of any significance happens whatsoever — which is good for you. If you avoid a lot of the news, you will have a lot more time to dedicate to other things. Feed your brain good food and you’ll get better results. It seems that simple.
Dobelli himself has sworn off the news. And he reports he feels much better for it: “less disruption, more time, less anxiety, deeper thinking and more insights.” I can’t do the whole idea justice here. If you want to read Dobelli, check out the full essay here.
Print it out. Turn off the smartphone. Stop checking email for 25 minutes. And just read it. Be forewarned: It might just change your life.
Chris Mayerfor The Daily Reckoning
Chris Mayer is managing editor of the Capital and Crisis and Mayer's Special Situations newsletters. Graduating magna cum laude with a degree in finance and an MBA from the University of Maryland, he began his business career as a corporate banker. Mayer left the banking industry after ten years and signed on with Agora Financial. His book, Invest Like a Dealmaker, Secrets of a Former Banking Insider, documents his ability to analyze macro issues and micro investment opportunities to produce an exceptional long-term track record of winning ideas. In April 2012, Chris released his newest book World Right Side Up: Investing Across Six Continents.
I’ve read the DR for many years, and most of “your” books. This probably qualifies as a form of filtered news too. And, yes, I have gotten a few good investment ideas here.
I figured all this out a long time ago, canceled cable television and the daily newspaper and feel much better for it. The human mind was never made to digest all of the bad news from an entire planet.
I dropped the Wall Street Journal last month. Have not missed it. I don’t wathe TVE news. I check headlines once a day on Drudge, but need to give up on that. But I won’t give up the Daily Reckoning just yet.
Oddly enough I consider the DR a form of news along with Bloomberg. I must agree that the reasons given for the market swings in the main stream media, especialy oil prices, are just wild guessing for the most part.
Have to read the WSJ daily, it let’s you know which war the neo-cons are planning next. That way you can go long Raytheon.
I’m basking in your affirmation of my Canadian cynicism that has led me, for at least 40 years to refuse to be the object of news media’s indoctrination. Once one catches on to how much isn’t told that should be (aka censorship), & how ‘they’ distort the facts when you or a friend saw or experienced what actually happened, why would you waste your time! I love CS Lewis’s quote on just not buying bad papers & they’ll go out of business!
Let’s face it, its been all downhill anyway since the Mogambo Guru left us to fend for ourselves.
The problem with the news is (and this has been a march since the 19th century) It has been a Tabloid-Reformist model of news that is going back to its pre 19th century model (just tabloid). News is just taking facts from the world around you and trying to tell a story that connects with the audience.
Man Bites Dog is a story because it defies expectation
We all can relate to something being weird and different
Dog bites man isn’t a story because its to ordinary. there is no story there.
For my money skip the Economist and 75% of your “instead” list and you’ll be almost there.
In the 1960s, total credit in the U.S. broke the one trillion dollar mark...and since then, it has expanded over 50 times. But now, as Richard Duncan explains, the explosion of credit that's made America prosperous, threatens to take the entire economy down. And that could mean the return of another depression...
News flash: The future is uncertain. (Gasp!) But given this uncertainty how are you supposed to invest successfully? It would be nice to ride stocks on the way up... and bow out before the crash... but few are able to do it without sheer luck. Chris Mayer, searching for a successful method, looks back to the 1929 market crash for clues...
As owner of the world's reserve currency, the US has enjoyed a cushy spot in the global economy. But with the rise of a group of rival countries the dollar's reserve status is under attack. And if it somehow gets knocked off its perch, the effects throughout the world (and in the US in particular) would be disastrous. Liam Halligan explains...
The US population is aging. The total number of births in the US peaked over seven years ago. And as the Baby Boomer generation enters retirement, it's becoming clear that there's no easy way to offset the trend. And that presents some unique investment opportunities most people have overlooked. Greg Guenthner explains...
Despite rapidly rising food prices, American households still spend relatively little on groceries. And while plenty of factors contribute to lower food costs in the US, that can lead to serious competition... and that means a good investment opportunity is right around the corner. Dave Gonigam explores...