Lack of posts because I have been on the go non-stop for about two weeks.
If there were two of me, it would be so much easier.
I ended up giving a talk to a private family investment office about why they were missing out not participating in social media or the blogosphere. (For free because I consider this good practice for my presentation skills and for getting to grips with my chronic stage fright).
Anyway a few observations.
1) there are a lot of professional investment people out there who have no idea about the private market in information. They still digest all their news from official sources and consider things like Twitter noise or unsubstantiated rumourtrage that can’t be trusted without ever having tried it themselves.
They are at a huge disadvantage and have missed major trends as a result and don’t even realise it.
2) even without using social media sources, Reddit or RSS feeds they consider themselves bombarded with too much information already (I was like, “welcome to my life!!” Poor dears ).
3) problem is they believe if they just put their heads in the sand the information dump will be controlled. They looked genuinely worried when I exposed them to all this quality additional material. “How are we supposed to take all this in?! How can we cope?!”
The reaction was anger with huffs and puffs, and pushback. Like, how dare something like this infringe on my way of doing things.
Now I agree information overload is a real problem. And I get frustrated myself. But my reaction has never been “stop, make it go away” or “this is unfair on me how is anyone expected to keep up?! “
Truth is, information is power. You can choose to ignore it and get behind, but this is a market like anything else. And you can’t stop or shut it down just because you can’t keep up. Only the strongest and best at absorbing and processing all this information will survive.
This is why bloggers and journalists like us (those using social media rather than those using old techniques) become so insightful. We do the reading so you don’t have to.
But guess what, the amount of material we consume on a daily basis relative to the investment community which still operates on 1990s information terms (a research note here, a pontification there, a look at the newspaper — yesterday’s news, tomorrow ) makes me realise the scale of the power chasm that is forming between the informed, those who know and do exploit the information available, and the uninformed, who don’t because it gets in the way of their quality of life.
The new inequality will be an information absorption inequality.
You can’t switch the information off. You can’t opt out without the trade off being that you will be dumber and less informed and thus probably more rubbish at making investment choices.
There will always be a Joe Weisenthal who sets the benchmark for what the human brain is capable of absorbing.
Information absorption is like an Olympic race, and the most informed wins inevitably. Joe is out there right at the front. He’s followed by other social media journalists, investment peeps and academics who do get the need to fully engage. Then there’s a bunch of lay people (I lie, because sometimes the lay people are ahead of Joe), and miles in the background are the old school money managers.
Why are people still giving these people money, when they can’t even be bothered to read a prospectus most of the time never mind engage in the real time economics debate going on online.
This does not apply to the guys I met because they at least appreciated the chasm and were trying to get with the times. But I’ve come across many managers who react to all this with real stubborn arrogance and denial. At the same time they marvel at how insightful I am and the fact I know so much.
First, I tell them I don’t know anything compared to some of my colleagues and all I do know I learned from the internet from freely available resources. I work at being informed 24 hours a day. I’m not some sort of genius, I just try to keep up in the information race.
And it is survival of the fittest.
This is the Good Will Hunting era. Anyone can make themselves a genius if they just try to keep up with the sources which are available.
Ignorance is choosing not to engage and being close minded to new information sources.
I should emphasise this information was always out there, it was simply never so easily or freely available. It was siloed or withheld. Information access has been democratised however. You can either choose to participate or fall into the new social subclass of the uninformed but stubbornly opinionated.
You know the way computers get smarter because of the quality and quantity of the data they process. I don’t think humans are any different.
It’s all a question of data mining.
We used to data-mine relatively at the same speed, but in niche pockets.
Our views were compartmentalised as a result. We failed to see the big picture.
This has changed.
Social media afficiandos, especially finance themed, are becoming the best natural data miners in the world. They are consequently becoming the smartest people in the world.
(Though the crisis has also played a role in upping everyone’s learning curve.)
Anyone not engaging will lose out. At least until they create the brain augmentation pill or Matrix style brain uploads.
*I am available for presentations ;-) —specifically on how to extract information previously un-mined, on keeping up with Joe Weisenthal and Joseph Cotterill, and on why all this matters
**don’t be too exasperated. Learning begets learning.
***Written on a Samsung galaxy, please excuse typos.