- Ref:: Of Dollars and Data
- Title:: The Age of Financial Misinformation
- Author:: Nick Maggiulli
- Year of publication:: 2021
- Category:: Blog
Notes from reading
"A lie travels around the globe while the truth is putting on its shoes"
"Falsehood will fly, as it were, on the wings of the wind, and carry its tales to every corner of the earth; whilst truth lags behind; her steps, though sure, are slow and solemn, and she has neither vigour nor activity enough to pursue and overtake her enemy"
we now live in an age of financial misinformation. An age where a misleading chart/data supporting a false narrative can take the financial world by storm.
The speed at which information can be shared matters because of how we form beliefs. As Annie Duke explained in Thinking in Bets, we tend to form beliefs in the following way:
- We hear something;
- We believe it to be true;
- Only sometimes later, if we have the time or inclination, we think about it and vet it, determining whether it is, in fact, true or false.
As you can see, the checking part comes at the end, if at all. This is the problem.
Because it’s never been easier to spread financial information, but also never been harder to check it. Complicated financial information requires more time to check than it does to spread. This is especially true if the data is particularly large (i.e. cant fit in Excel) or if it requires complex data manipulation
It isn’t just incorrect information that’s the issue, but misinterpreted information as well
The increased information overload has led more people to abandon their due diligence simply because they don’t have enough time to process and check all of it. However, when you see a financial result that is shocking or unexpected, you should be skeptical before accepting. Do some sanity checks. Talk to some experts. Figure out if it makes sense. Then tell others.
Learning to slow down in a world that is speeding up may be the only way to stay ahead of the curve.