Photo by James Bold
My experience of COVID-19 has been punctuated by an endless stream of news and opinions. I don’t take issue with opinions in general; to have an opinion is to be human. What I struggle with is how we interpret them, and our failure to appropriately qualify them.
In this piece, I’ll try to explain why we should qualify the content of an opinion, and always have regard to the incentives of the person expressing it. I’ll aim to describe that the why of an opinion can be more relevant than the what.
While slightly philosophical in nature, I hope this is a piece that helps us be more mindful when interpreting the information flying around us. But first, a little background.
Opinions have gone viral in the age of COVID
For two months, all we’ve talked about is ‘the virus’. My personal reaction to the deluge of news and opinions has been to withdraw; I almost feel like constant exposure to updates leaves me less-informed and less-educated. This response, while definitely borne of fatigue and some narcissism, also has roots in a calculation: what is this person’s incentive for communicating this, and how does it add to or detract from the information’s validity or usefulness?
With COVID-19 as the prompt, the remainder of this piece is directed at explaining the interaction between opinions, incentives and accountability.
1 — Our yearning for narrative
News and opinion, as they relate to COVID-19, could be described as the weaving together of different datapoints: case fatality rate, incubation period, R0, co-morbidity and so on. In effect, we’re being given a story or narrative to explain these bits of information. But to properly digest this information, we need to acknowledge where the tendency to seek narrative comes from: our in-built hard-wiring.
Humans have used storytelling for thousands of years; we are programmed to use story and narrative to make sense of the world around us. We should therefore remember that the stories we are being told — whether about COVID-19, economic forecasts, or any other uncertain topic — are simply attempts to create relationships between potentially random datapoints in a very complex picture.
While not groundbreaking, it’s helpful to acknowledge that the desire to build a narrative around each new datapoint is driven by the hard-wiring of our brains, not simply the pursuit of actual truth.
2 — The relevance of distance from the underlying phenomena
For this discussion, let’s expand our relevant examples to include financial markets alongside COVID-19.
Both deal with entities and concepts that we don’t engage with directly in a tactile sense. ‘The virus’ itself is menacingly floating around us or incubating in the bodies of suspicious strangers; for the most part, it exists in our minds more than our senses. Similarly, financial markets deal with the relationships between financial instruments, themselves an abstraction of ‘business’; they therefore exist as constructs. They are both global, dynamic and complex. They also impact our lives meaningfully, and we’re therefore very engaged in understanding them.
We experience a large portion of COVID-19 and financial markets through news and media. To satisfy the desire ‘to know’ about these things, while also acknowledging their complexity, we often rely upon journalists and experts to interpret for us. Our aforementioned interpreters are traditionally one-step removed from the content; they’re generally relying on their access to ‘experts’, whether virologists or market commentators, to build the foundation of their opinions. And to be clear, they perform a very important role.
Let’s now compare COVID-19 or financial reporting to events occurring in our families. When one of my parents expresses a view as to the emotional state of one of my siblings, and what they believe is driving it, I have confidence their opinion may ultimately be accurate. They intimately understand the subject matter, the person, and surrounding circumstances; they are also close enough to perceive all elements. I’m not suggesting that the underlying issue is simple, only that they can wrap their heads around it and understand relevant causation.
Now replace ‘parent’ with ‘commentator’, and ‘child’ with ‘global pandemic’ or ‘financial markets’. When considering an opinion expressed by either group, I’m inclined to have more confidence in the parent than the commentator. I don’t think my mum or dad is inherently smarter than a COVID-19/market commentator. I just believe they’re more likely to have a valid opinion due to their proximity to the issue, and its relative simplicity.
All of this is to say that when considering opinions, we should acknowledge that it can be difficult to know anything. We must understand that the reporting of the pandemic or what’s occurring in financial markets is different from what is actually occurring in both. This is an important first step when qualifying opinions.
3 — Why is the opinion being shared; what are the incentives?
Sections 1 and 2 were about the integrity of the what. Section 3 is about why commentators — reporters and journalists — are expressing an opinion in the first place. My view: always start with incentives.
Unfortunately, we fail to pay sufficient attention to incentives. This applies generally, not just to media. A failure to understand incentives means that we do not appropriately understand why somebody is saying something.
What is the incentive of a typical journalist writing about financial markets? Being a journalist is an occupation. There may be some higher purpose a journalist seeks to address (‘truth’), but the same could be said for other white-collar professions: lawyer (‘justice’), founder (‘creativity’ or ‘problem solving’) or salesperson (…‘service’). While these purposes do factor in, we are ultimately driven by the desire to provide and ensure financial security (from which other needs are satisfied). Employers understand this, and therefore creatively link personal financial outcomes to outcomes that support an organization’s ultimate goals.
Some journalists operate in an increasingly corporate world, where their managers are incentivized to drive traffic and garner attention. To do so, most journalists must consistently generate content. Writing a column is effectively the same thing as selling software: just doing a job. The problem occurs when we think the content is intended to inform or educate, when in reality the incentive of the author and publisher is to retain attention.
To be clear, if the content was terrible and didn’t inform or educate at all, we wouldn’t come back. I am therefore not suggesting that news, updates and opinions are useless, just that they don’t have our ‘understanding’ as their main motivation. I empathize with journalists in this regard, and empathize with doctors for the same reason: most industries are now viewed by managers and shareholders with a supply-chain optimization lens, which forces practitioners to make meaningful trade-offs, often at our expense.
4 — The cost of getting it wrong
Back to opinions. What happens if a journalist or reporter’s opinion is wrong? Is there any accountability? Working as an investor, I can express an opinion through making an investment; in time, the success or failure of that investment will either validate or invalidate the earlier opinion or view. If I make a poor investment decision, I am accountable to it and it may impact my mandate going forward. The same is true for most professions that involve forming a view: if you get it wrong, your future outcomes are effected.
When you’re in the business of expressing opinions, the cost of being wrong matters.
Let’s return to reporting on COVID-19 or the financial markets:
If a Chief Medical Officer, doctor, or virologist expresses an opinion, and gets it wrong, people get sick and may potentially die. The stakes are high.
If a Chief Investment Officer or portfolio manager express an opinion, and gets it wrong, people lose money. The stakes are clearly lower than the COVID-19 example, but there are clear and quantifiable costs.
What happens if the journalist or reporter gets it wrong? The personal costs to them are low. The model incentivizes opinion-making within a band that doesn’t expose them to too much personal downside (i.e. people not wanting to listen to them again), while permitting them to opine on issues we’re clearly invested in, in a cadence that satisfies their managers and corporate owners.
I am no supporter of the current US administration, or its rotating crew of dishonest spokespeople, but the new press secretary makes a point (and yes, I know she’s singling out the administration’s most critical voices):
If someone express an opinion, they should be accountable to it. If there is no clear mechanism for assessing validity, then we should be wary of the opinion in the first place.
I am not suggesting that all reporters and journalists are the same. Some are subject matter experts, and are therefore well-versed in specific content. Some are ‘reporters’, filtering and passing on relevant information. And some are professional opinion columnists, shifting from one topic to the next, addressing those of greatest importance to their readers. But modern media has evolved to make it more difficult to distinguish between these different intermediaries. With a variety of opinion-makers and unknown incentive structures, there’s a pronounced need to qualify.
5 — The irony
The irony of writing an opinion about opinions is not lost on me. Why am I sharing this? How close am I to the subject matter? What are my incentives? What if I’m wrong? If these questions occurred to you while reading, then there’s a chance I’ve gotten my intended message across! To answer:
Why am I sharing this? I write mainly for myself. I have different ideas that bounce around my head. Most of the time they exist by themselves, without much context. Sometimes though, they connect and give me a glimpse of a potentially useful thought or concept. If I feel the concept is worth pursuing, I’ll try writing about it and figure out whether it’s coherent, valuable, valid or useful.
How close am I to the subject matter? I write about how I think, with myself and those around me as the subjects. I am not an expert on the topics I write about: complexity, values, investing, career and others. But I write from a personal perspective and what my personal interaction with each topic makes me think. Does that make me close enough to the subject matter to have something relevant to say? I think it does, but you’re welcome to disagree.
What are my incentives? My incentive to write and publish is to bring accountability to my own thinking and practice the ability to communicate clearly. I don’t get paid and don’t get read broadly. I feel smart when I write something smart, and don’t mind you thinking I’m smart if you enjoy something I write. In 20–40–60 years’ time, I hope to have a body of work that reflects the evolution in my thinking.
What happens if I’m wrong? I have no major upside to being ‘right’, and no downside to being ‘wrong’. I don’t think there’s anything in my writing that someone could rely upon to incur a loss, whether physical or emotional. At best, the impact to the upside-and-downside is mildly reputational.
While the above may read as self-absorbed, it’s honest, and hopefully helps qualify what I write.
Bringing it together
The most effective tools we have to interpret the world around us are an appropriate filter and a mildy-skeptical mind. We must be increasingly mindful when it comes to opinions on emotive issues, especially so in a time of extreme partisanship. I chose to discuss COVID-19 and financial markets as they’re the loudest topics today, but I believe the principle applies more broadly.
This piece isn’t intended to attack journalists; their job and function is arguably more important than ever, and I tried conveying a sense of empathy towards the challenges and trade-offs they face. I am also not suggesting opinions aren’t important. I’m suggesting the opposite: what happens in the confines of our own minds is all we really have. We should fiercely guard the activity that occurs between our ears. Our opinions matter and shape our behavior, and it is the responsibility of the recipient to qualify information in a noisy world.
To qualify an opinion doesn’t undermine it; it makes it more valuable. At their core, the majority of things we express as people are opinions. To qualify an opinion is to respect it, to exert greater energy in understanding where it comes from. Ultimately, to understand the origin of another’s opinion is an exercise in building a mirror for ourselves, in which we can reflect on where our own opinions come from. Hopefully, we emerge more mindful and self-aware from the practice.