I was struck by an article  in the AFR on Wednesday (18th August) in which writer James Weirs correctly observes that we as humans are hard-wired towards negativity.
His piece was inspired by the recent performance of the ASX 200 and other markets and the plethora of doomsday analysis that inevitably accompanies such milestone performances.
While this negativity might be a very useful trait when trying to avoid becoming a sabre tooth tiger’s lunch, it’s perhaps not so helpful in the modern 24 hour news cycle! The media is well aware of our tendency to respond to the negative – hence their inevitable bias. To help balance up this tendency, I have severely limited my news digestion during Covid to hardly anything on a daily basis, a quick scan of the paper, and a 15-minute weekly round-up honing in on the facts. The interesting thing is that there is about 15 minutes of actual news per week, spread out across the 24/7 news cycle which is largely on repeat. So hard-up are the media for actual news that they have resorted to interviewing each other, fellow journalists and a variety of so-called experts (that normally fit with whatever negative narrative they are pushing). This helps to catastrophise any number of borderline news events.
Now don’t get me wrong – I love having a free press – but the analysis and the experts that accompany the news often need taking with a pinch of salt. This is the point, well made by James Wier. A survey by US firm CXO looked at 6,582 forecasts published by 68 different gurus between 2005 and 2012 and found a success rate of 47 percent – so you get better odds tossing a coin than listening to the news!
Here’s my takeaway for what it’s worth. Listening to conversations in the media about sabretooth tigers significantly increases the odds you might mistake next door’s cat for one!