Media OxymoronSubmitted by Sims Investment Management, LLC on June 25th, 2020
I'm starting to wonder if having an endless supply of outlets and talking heads is actually a bad thing. If you're somehow reading this in North Korea (great VPN by the way, hope you don't get caught), you're banging your head against your keyboard in frustration. You've got one talking head, and he'll take you head off if you don't agree!
Suffice it to say, the US is the polar opposite of North Korea. We've opened up the floodgates, and advice, opinions, word vomit, and some things even more rancid are now commonplace. We encourage differing points of view, active debate, free speech above all, but hopefully within a framework. For a while, we had that framework – it was the media.
If you're over 40, you remember the Big 3 channels growing up:
In the late 70s, an astounding 90% of prime-time viewing audience was centered on one of these three. By 1989 that number had fallen to 67%, but anything over 50% for a media outlet today is unfathomable.
Now don't get me wrong. I'm not in favor of returning to the oligopoly of the 70s and 80s, or an authoritarian nightmare that is North Korea. But as the Internet has completely transformed how we receive information, it's also made it much more complex to decipher. If NBC, ABC, and CBS were colluding to brainwash me, I could buy that and perhaps seek my news on AM radio or via some other antiquated medium.
But today, I see a news story on CNN, catch a snipet of a podcast, read a provocative opinion piece in the New York Times, plug in for a roundtable panel on Fox News, and start the day all over again tomorrow with Squawk Box, literally squawking at me first thing in the morning. Before I consider oil futures, I'd love a cup of coffee and to move my Labrador off my head.
The current state of affairs is certainly no better. Since March, the Centers for Disease Control (CDC) had been warning against mass gatherings. We know the virus spreads quickly when folks gather together and talk, yell, sing, etc. in close proximity. Now, I don't care how you feel about the ramifications of contracting COVID-19. You might be healthy as an ox and want to play the health odds. Said odds are undoubtedly on your side, but the typical response back to "healthy ox guy" was we're not concerned about you, but instead you spreading it to others who aren't as healthy.
Ok, I don't want to fall down a COVID rabbit hole here, but the flip now to encouraging mass gatherings or restaurants keeping tables 6 feet apart but maintaining take-out lines packed with hungry patrons is plain confusing. And many of these recommendations are coming from CDC officials, epidemiologists, and other medical professionals.
Just so we're on the same page, this is nothing new for me. Working in finance, and glued to the market an unhealthy amount of time, mixed messaging is a mainstay. You'll see headlines like the following and naturally come to one conclusion:
- "Epic Job Market"
- "Earnings, Guidance Still Positive"
- "Volatility Has Settled"
- "Bullish Seasonality"
Things are looking up!
Yet the very same week (and even the same day), another "reputable" outlet will come out with:
- "Fed Still Hiking"
- "High Debt Levels"
- "Sector Weightings Out of Whack"
- "Emerging Bear Market"
There are two ways to interpret any piece of information. In all actuality, there's more but stay with me. Here's a made-up statistic:
60% of dogs living on the street tested positive for rabies.
If you are a dog-lover and feel society should do everything in its power to throw all available resources at rescuing dogs and finding them a home, the information that you will communicate with this statistic is we are failing as a society to care for dogs, and as a result, 6 out of every 10 dogs we see living on the streets is suffering terribly from rabies. We must help these animals today.
Here's another angle. Say you are more inclined to get dogs off the street, but not necessarily into shelters to care for them, but rather have them euthanized. Your argument here would be that 6 out of every 10 dogs we see living on the streets is a danger to us because they suffer from rabies and could easily spread it to children or the elderly.
It's the same statistic, the same piece of information, but presented in two very different contexts. Mass gatherings are bad in a COVID-19 environment, but only bad sometimes. Volatility has settled in the market, but only in certain areas. Back in the days of the Big Three, we had one message. It might have been the "wrong one" depending on your personal views, but today's mixing is leaving everyone in a more confused state.
The only way forward, for now, is to consume as much information as you can from multiple outlets and then arrive at your own decision. This will take up 7 hours of your day, and then after that, you need to figure out how to work, take out the garbage, read a story to your kid and carve out some time for a Netflix Series. Quite a world we've crafted for ourselves.