Family Out for an Evening Stroll. Menacing Man Wields a Baseball Bat!
Imagine you’re out for an evening stroll after dinner, and you encounter two distinct groups. First, there’s a picturesque young family with their chocolate Lab and twin toddlers, laughing and ambling down the street. Shortly afterward, you come across two burly men engaged in a heated discussion, one brandishing a baseball bat.
Now, which group captures your attention more? Which one would you likely recount to others later? The answer, for most of us, is the pair arguing. Not only because it’s (hopefully) less common, but also because it’s hardwired into our DNA. We instinctively focus on potential threats—whether they’re saber-toothed tigers or large men wielding baseball bats."
Today’s news is driven by ad revenue. Researchers continue to develop more and more effective ways to track and drive views, clicks, and profits, and it is through startling and disturbing images and copy.
If it bleeds, it leads! This rather morbid phrase was coined by a New York Magazine reporter, Eric Pooley, in 1989. Pooley was troubled by the sheer number of grim and menacing headlines.[i] "The thoughtful report is buried because sensational stories must launch the broadcast: If it bleeds, it leads."
The financial media is no different in following a similar formula. A small group in San Diego did a simple study centered on CNBC headlines and market performance.[ii] The research focused on the lead headline on CNBC’s website thirty minutes after the market close. The group scored the headline each day as positive = +1, neutral = 0, or negative = -1 then simply totaled the results. Over six-months, this headline index was down 28 points while the S&P 500 was up 7.95%.[iii]
We have all likely realized this negative and sensational bias and maybe even wished or looked for an alternative. The City Reporter of Rostov-on-Don, a city in southern Russia of over a million people tried it. On December 1, 2014, the newspaper (print and online) reported nothing but positive news. They even attempted to put a positive spin on somewhat negative news, "No disruption on the roads despite snow.” The experiment failed miserably – readership plummeted.[iv]
This deep-seated negative bias that we seem to have can be exacerbated by another bias – confirmation bias. In the 1960s, cognitive psychologist Peter Cathcart conducted several experiments around confirmation bias. Cathcart was able to prove that people tend to seek information that confirms their existing beliefs.[v] We all want our beliefs to be the correct beliefs.
The combination of these two biases, negative and confirmation, has the potential to lead us to some very convincing opinions - our cities are increasingly dangerous places, there are more global conflicts, there are more natural disasters, the global economy is about to crumble.
However, the data conveys a different picture. The Pew Research Center points to sharp declines in violent and property crime over the last quarter-century.[vi] The number of natural disasters and their economic impact (accounting for inflation) has remained flat while deaths from natural disasters continue to decline.[vii] Global life expectancies continue to rise, developed economies GDPs are rising, global income inequality has declined, and military conflicts are at the lowest level of recorded history.[viii]
We are not likely to change who we are as human beings, but we can be more aware of what is happening when you walk by a newspaper stand (they still have those?), scroll through your social media feeds, or flip between 24/7 news channels. An extraordinary amount of research, data, and money has gone into determining the right words, the font of the headline, background color, and, often, specifics about you to evoke a reaction - a click.
So… we have a media and marketing machine that has scientifically confirmed we prefer bad or sensational news and then we are continually focused on all those pieces of news that confirm our opinion. This is a recipe for uncertainty and anxiousness especially when it comes to those topics, we hold most dear – health, personal safety, and financial security.
What if the path to a happier, healthier, more productive life simply lies in the consumption of less commercial media? Be informed, just be careful of the motivation behind the information.
As always, please call with questions about this topic or anything else on your mind.
My Best,
Ryan
[i] If it Bleeds, it Leads! Sourced from - http://evaluatingconversations.weebly.com/if-it-bleeds-it-leads.html.
[ii] In CNBC Biased? We Think So. Sourced from - https://bulloakcapital.com/is-cnbc-biased/.
[iii] S&P 500 – Historical Data – 3/20/2018 – 9/20/2018. Sourced from - https://finance.yahoo.com/quote/.
%5EGSPC/history?period1=1521518400&period2=1537416000&interval=1d&filter=history&frequency=1d
[iv] Russia: 'Good news day' decimates website's readership. Sourced from - https://www.bbc.com/news/blogs-news-from-elsewhere-30318261.
[v] How Confirmation Bias Works. Sourced from - https://www.verywellmind.com/what-is-a-confirmation-bias-2795024.
[vi] 5 facts about crime in the U.S. Sourced from - https://www.pewresearch.org/fact-tank/2019/01/03/5-facts-about-crime-in-the-u-s/.
[vii] Natural Disasters – Empirical Review. Sourced from - https://ourworldindata.org/natural-disasters.
[viii] The World Is Actually Becoming a Better Place. Sourced from - http://theconversation.com/seven-charts-that-show-the-world-is-actually-becoming-a-better-place-109307.