“Post-truth - relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief.” – Oxford English Dictionary
The word “post-truth” was recently named the word of the year by Oxford Dictionaries as its use skyrocketed 2,000% this year. At its core, post-truth is the act of influencing people by appealing to their emotions at the expense of facts and truth. The word post-truth has been around for a few decades, but according to the Oxford Dictionary the spike in its use was centered around two major events this year: the Brexit vote and the US Presidential election. In both of these instances, the building of a collective narrative became more important than the facts. That is not to say that everything our presidential candidates or the Brexit champions said during their campaigns was false, but there was a good amount of disinformation spread to support their collective narratives.
The root of some of the disinformation stems from a new trend in fake/false/totally fabricated news. The NPR Planet Money team recently did some investigative journalism to track down the source of a single fake news story in a recent podcast entitled Finding The Fake-News King. What they found is that there is a lot of money to be made in the fake news business, an estimated $10k - $30k a week for this particular “author”, and the reason fake news works is because people want to confirm their existing beliefs. This default setting in our brains is known as the confirmation bias in the world of behavioral science. This bias stems from our human desire to seek out information that confirms what we already believe while simultaneously ignoring or disregarding information that might challenge our beliefs. According to psychologist Scott Lilienfeld, “We’re all mentally lazy. It’s simply easier to focus our attention on data that supports our hypothesis, rather than to seek out evidence that might disprove it.” The information age of the Internet is only helping to perpetuate our confirmation biases in a post-truth society as fake news is rapidly spread through online social networks where circles of people already share similar beliefs.
Historically, the practice of intentionally misleading people through the publication of fake news would simply be referred to as lying or at a minimum deceiving, but both of those words have a negative connotation which indicate that there is some sort of penance to be paid for the action. The difference with post-truth is that, although we may be annoyed by the practice, there is little to no repercussion for the action. Post-truth is quickly becoming an acceptable means of communication as long as the greater good is served through the perpetuation of the narrative. In a post-truth world, the end always justifies the means.
I’m reminded of news story that gripped the country a decade ago when a women in Durham, North Carolina accused several members of the Duke Lacrosse team of sexual assault and rape. The story spread like wildfire because it hit on so many social levels: men vs. women, white vs. black, privilege vs. working class. In the end, it was found that the allegations were completely false. In the face of this shocking discovery, many people who had already assumed the role of judge, jury, and executioner for the young men on the Duke Lacrosse team simply changed the narrative to concentrating on the fact that racial and social injustice exists and needs to be addressed in our country. And although many of us would agree with that sentiment, the end (shedding light on an injustice) in no way justified the means (forever changing the lives of a group of young men with false accusations). This post-truth pivot was so prevalent in the media that I would even venture a guess that some of you reading this post may have even forgotten that the Duke Lacrosse team was eventually found innocent of all charges.
It’s somewhat ironic that as access to information has exponentially increased, the quality and accuracy of the information has dropped precipitously. I’m not saying that we were all better off hundreds or even thousands of years ago when information (or disinformation for that matter) was disseminated at the will of a select group of individuals, but it still doesn’t change the fact that the free flow of information (which includes disinformation) isn’t always a good thing. Author and speaker Ralph Keyes wrote that post-truth “erodes the foundation of trust that underlies any healthy civilization” because we end up losing our “grounding in reality.”
In a post-truth world, we must be extra vigilant about the information we consume and choose to believe. Disinformation is everywhere you turn. When it comes to investing, perhaps now more than ever, it is of the utmost importance to understand the why behind your investment strategy and not be swayed by arguments that tap into emotions rather than reason. For those looking for a captain to help them navigate through the fog of investing, it is extremely important to work with an advisor that has your best interest at heart and ideally is being held to a fiduciary (or higher) standard. Our goal at Season Investments is to be just that for our clients by establishing a relationship of trust and transparency. We are constantly reflecting on the why behind all of our investments and strategies. Our differentiated approach to investing relies heavily on systems and processes designed to reduce the likelihood of us falling prey to an emotional decision that may have been perpetuated by a post-truth narrative, thereby keeping us and our clients “grounded in reality.”
Author Elliott Orsillo, CFA is a founding member of Season Investments and serves on the investment committee overseeing the management of client assets. He spent nearly ten years as a financial analyst and portfolio manager working primarily with institutional clients prior to co-founding Season Investments. Elliott earned a bachelor's degree in Engineering from Oral Roberts University and a master's degree from Stanford University in Management Science & Engineering with an emphasis in Finance. Elliott and his wife Gigi have three children and like to spend their time outdoors enjoying everything the great state of Colorado has to offer.
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