Responsible Journalism – is not a word which you would have heard. It was always assumed that journalism would be responsible. However with so many ‘media managers’, seo, choice of words, psychiatrists playing a role in advertising it is difficult for the layman to understand! As a layman how will you make a distinction between an article written by a journalist who understands the business, a media plant, a plant by a disgruntled employee, or by a vendor. It is a real challenge.

The amount of misinformation that is available in the world is unbelievable.  Rather than seek out the truth, confirmation bias results in the spreading of lies with little thought as to whether one’s existing beliefs are correct and whether it is rooted in reality. What is worse is that the speed with which this misinformation is spread (Whats app!) analysis? no. Our brain now simply reacts and moves on to the next distraction. Getting people to read 500 words is a challenge. How will people have the patience to read a 3000 word article.

How and why should this impact you? The price of a share finds its correct level but false alarms can make the price oscillate dramatically like a pendulum. Are we ready for that. I remember reading an unbelievable news item about a company (I still cannot believe it) but had the resources to talk to an ex employee and quickly guessed what happened. Not all of us have such resources all the time. It is scary and makes me keep going back to US based MnC in my portfolio instead of a Korean, Jap or even European. Indian promoters – many of them are awesome – but still scares me.

Dissent is seen as stupid. The narrative now in the investment community is void of any actual questioning of both logic, and actual information.  Interest rates will only go up, stocks will only go up, inflation is going to be at 2% for the long future, and volatility is going to remain historically low. SIP will continue for life, will grow at 10%, and we are decoupled from the World.  Why does everyone believe this is the future?  Why does a journalist not do a story on the size of the government? Why is it that just a couple of people are worried about democracy, and 135 crore people are sure that democracy will survive? Because interest rates have already gone up in the US, we want Indian rates to remain stable? stocks have already gone up, and volatility is historically low. Crude prices will fluctuate from 40$ to 100$. That is fine. The narrative reacts to what has already happened, and spreads quickly. Entire investment decisions are then based on the story, rather than the fact that mean reversion dictates the exact opposite is the truth of the future. In a generation which has the same attention span of a goldfish, can SIP really be rising and perpetual? Are fund managers able to spot companies which want to take a 30 year view on the economy, industry, own firm….

Fake news can impact your portfolio as much as a scam – and that is not amusing. It is scary.