I’m not here to make a statement about the press, although I might be all too happy to get on that soapbox. I’m talking about doing diligence.
We investor types juggle a lot of tasks on any given day and given that time is limited, we have limited time for any one task. This can be a real detriment during the diligence process, which requires concerted effort, open-mindedness and an awareness of our own biases. It is all to easy to pick up on a headline we hear and ignore the story behind it.
When we hear a headline delivered as a statement of fact, we are at risk of taking it as gospel truth, particularly if the statement comes from a trusted source. This is particularly true when the headline confirms our own bias or if the statement is delivered with overwhelming intensity. In either case, we may not take time to understand the story behind the headline. If the headline confirms our bias, human nature is move swiftly to the next task. Likewise, human nature overweights headlines delivered with gusto.
I view diligence as a process of gathering facts, filtering them and making sense of them by applying analytical thought models that I trust. I trust those models more than I trust myself, because I’m acutely aware of my own human biases enough to sequester those biases from the decision-making process. And I don’t trust headlines, because they are written by humans who have their own biases.
So ignore the headline; read the story. Give me the facts; I’ll write my own conclusion.
Filed under: Decision Making, Lessons Learned, bias decision-making, diligence, headline, story
