Navigating The Information Garbage Super Highway

I’ve been asked a number of times over the last few months on podcasts and in interviews about how I consume news and information. Chief Investment Officers (and allocators more broadly) are responsible for constantly integrating new data points into our portfolio outlook and strategic allocations, requiring us to keep a close eye on trends and changes in a wide variety of markets, geographies, and sectors. We consume an enormous volume of data, commentary, headlines, whitepapers, news analysis, and other topical reads. Today, let’s talk about some of my “best practices” for information consumption, and practical advice to consider as we look at the tsunami of AI-created media content building up to wash over us in the coming year. ?

I was not really allowed to watch TV as a kid, so I was a super-user of the Saint Paul Public Library system (special shout-out to the Highland Park branch). My mother’s arbitrary rule when I was 7 or 8 was that I had to read the entire “young adult” section before I was allowed to move on to other sections. I taught myself how to speed-read to get through all that drivel as fast as possible. Those of you who were kids in the 1980’s and early 1990’s will recall just how terrible the YA section used to be! Speed reading turns out to be a super helpful life skill, especially if you can do it with a high degree of comprehension. I enhance my comprehension via notetaking and can often recall entire pages of text and read them to myself later. Just don’t ask me to remember anyone’s name!?

I vacuum up a massive amount of information every day. As I’ve previously mentioned, I’m terrible at sleeping, so I start my daily informational podcast listening between 2:00 AM and 4:00 AM. Reading time starts around 5:00 AM, when I zip through the Wall Street Journal, Financial Times, New York Times and a bunch of subscription newsletters. My interests are far-ranging: geopolitics and economics, markets, currencies, technology, medicine, local news, comedy, science and “Florida man,” just to name a few. A lot of what I consume is garbage that doesn’t stick. But I have an eye for interesting data points that could eventually become more signal than noise, so I store a ton of those little nuggets up every day. If you are a regular reader of this newsletter, you have seen loads of stats flow through as links and references. Fun fact: most of that material gets put on the Shannon hard drive during my morning information bender.?

My information consumption rules:?

1. Go directly to primary information sources?
2. Seek out long-form writing?
3. Always search for counterpoints or a highly differentiated interpretation?
4. Never scroll headlines?
5. Do not consume news or information you need for your day job from social media?

You will notice a theme throughout the above rules: they are designed to slow down the information consumption process enough to encourage both comprehension and assessment for accuracy. Scrolling and social make your thoughts 1) more emotional and reactionary and 2) shorter and dumber. Longer forms of writing help mitigate your emotional response to terrible takes and click-bait headlines by stretching out the read time, which allows your brain to process longer thoughts and thus appreciate nuance and complexity. Taking the time to sit with concepts that make you uncomfortable because they are counter to or outside of your worldview is an absolute superpower in this day and age. ?

This issue is so pervasive Princeton University offers a course called "The Media in America: What to Read and Believe" taught by Washington Post investigative reporter veteran, Joe Stephens.

“When you look closely, as my students do, often you’ll find you are reading a second- or third-hand account,” Stephens said. “The Washington Post breaks a big story, but often you will be reading about it in The New York Times. Like a game of telephone, the farther you get from the original account, the less reliable it becomes.”?

Critically, if you are using a “platform” to consume your news, please approach every day with 100% certainty that you are missing important swathes of information. This is true of every single social media or news aggregation platform, including (but not limited to): YouTube, Google, Facebook, Twitter/X, and TikTok. The platform algorithm is designed to keep you engaged, not informed. The longer you stay on the app, the more revenue the platform clears. Your social platform of choice literally doesn’t give a shit what you look at and will serve you whatever garbage it knows will keep your eyeballs glued to your screen. Most humans scroll, get triggered by headlines or takes, and double down on clicks, reposts, likes, etc. Turns out we’re a very easy species to manipulate once you know a little bit about dopamine. ?

Last month I had the honor of being interviewed by the inimitable Mark Steed from Arizona PSPRS at the Academy for Institutional Investors. He put a new spin on the “how do you drink from the information firehose” question by asking: how does my process for taking in information change when I involve the rest of my team??

In addition to advising on good sources of information, a crucial part of my job is to help investment team members learn to filter information. One way I do this is to find examples of a very sharp narrative shift or clear economic signal and share both the information and the “why” with the whole team. Once or twice a month, I find something that is clearly a “signal” and send it to the whole investment team. For example, over the summer there were several articles authored by investors returning to mainland China in person for the first time since 2019. These folks were particularly struck by the level of trauma the pandemic lockdowns had taken on people, and particularly noted a large number of business owners making non-economic business decisions. Another example I sent to the team was a September analysis of the (fairly staggering) amount of losses on bank balance sheets from investment securities (mostly Treasuries) and commercial real estate (mostly non-class A office). ?

We are entering a period of time where the firehose of news is becoming a tsunami, thanks to unregulated AI tools at the disposal of basically anyone. The quantity of low quality and misleading, as well as outright intentionally fake, news is set to expand at an outrageous pace in the coming year. We're already seeing AI-generated disinformation posing a threat of misleading voters in the 2024 US presidential election.

Jeff McGregor, CEO of Truepic is trying to combat the rise of AI manipulation by verifying and authenticating digital media at the point of creation. McGregor shared several insights on the Next Great Thing Podcast.

One great thing I learned: We’ll never move faster than AI can create to detect what’s fake. Instead, we need to shift our focus to authenticating what’s real. We’re all still buzzing about ChatGPT (and now, GPT-4). Maybe deep down, simmering beneath the excitement, is fear. Fear that the world is now moving at the speed of generative AI…and we just can’t keep up. As it keeps getting better and better at duping us into thinking that the digital content we see is real, it’s also getting better and better at “covering up” the very elements inside digital content that would ordinarily clue us into knowing what’s been altered or tampered with.? - Jeff McGregor, CEO, Truepic

It is not just the responsibility of CIOs and allocators to train our teams to consume information safely. It is the responsibility of every person who manages people, every parent, every teacher, every digital native with grandparents and parents on the internet. ?

What are you doing, readers, to ensure that you have guardrails in place for yourself, your team, your kids and your parents in this new phase of information overload? How will you adjust your media consumption habits to prioritize fact over fiction? How do you resist the temptation to click on what confirms your existing biases to get those dopa hits??

We do live in a profoundly strange time – stay safe out there.?