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“The illiterate of the 21st Century will not be those who cannot read or write, but those who cannot learn, unlearn, and relearn”

Alvin Toffler…… (Future Shock 1970)

One of our long-standing clients who regularly responds (favourably, thank goodness) to my monthly “Letters” told me on his most recent visit the other day, that the April one was the best I’d written for a while, thanks to me going “off-piste”, which a linguist pal tells me is French for going “erratically downhill.”  Mind you he also claimed that “crème de la crème” was French for “evaporated milk.”

Seriously though, I think I know what our client was getting at.  Because, ever since my first LFL back in February 2005, I’ve tried to regularly remind our clients, using different stories, that consensus “expert” views distributed constantly in umpteen news channels are usually wrong.  And that you can seriously undermine your prospects of a prosperous retirement if you make emotional buying or selling decisions purely as a response to the ever-changing “bad news” headlines.

Recent news stories about the growing number of teenagers suffering from stress-related illnesses added to my own observations of folks on train journeys or in restaurants suggest that widespread addiction to social- media isn’t good for our health or manners or encourage deep learning.

And now at long last, after years on the look-out for books or websites to keep learning, unlearning and relearning, I stumbled upon research by Rolf Dobelli which proves that addiction to headlines damages your wealth AND even worse, your health.  (Dobelli wrote that great little book, “The Art of Thinking Clearly.”  If you haven’t yet read it you ought to.  I highly recommend it.  Easy to read and thought provoking.  Worth dipping into every now and then).

In his online “Avoid News,” subtitled “Towards a Healthy News Diet” he has written at length on what he calls an “antidote to the news.”  He kicks off by reminding us that nowadays… “we are so well-informed and yet know so little.”  And goes on to explain why, reminding us that “news is to ourminds what sugar is to our bodies… dangerously toxic.”

At our core, as he reminds us we are “cavemen in suits and dresses.”  With brains formed slowly over thousands of years to suit our ancestors’ hunter-gatherer environment where typically they lived in small bands of 100 or less, with limited sources of food and information.  Today we inhabit a world that’s the complete opposite of what we were designed to handle.  And Dobelli goes on to compare the consequences of an inappropriate food diet with the way we devour what’s claimed to be factual news, but which is deliberately designed to be addictive and therefore bad for our health.

As a consequence we’ve now reached the same point in relation to information overload that we faced 20 years ago in regard to sugar diet excesses.  Research has now established that news and how it’s delivered today, is toxic.  So it’s a good idea to embrace an information diet.  Commonsense suggests that it makes sense to approach such a diet in the same way slimmers do if they want to get down to an ideal weight.  They attempt it with the support of others.  Which is why Steve and I write to you every month with our antidotes to consensus-driven worries from others with their own agendas - to catch your attention at all costs, no matter the consequences.

It’s now been established that bad news triggers your limbic system.  Ever-changing panicky and shock-horror stories apparently spur “the release of cascades of glucocordicoid or cortisol.”  This deregulates our immune systems and inhibits the release of growth hormones.  So your body can find itself in chronic stress.  Further research finds that high levels of “glucocordothingy” cause impaired digestion (my mum used to be “put off her dinner” by news that the stockmarket was down and that was over 30 years ago).  They also lead to lack of cell, hair and bone growth, increased nervousness, and susceptibility to infections.  Not nice then.

So news addicts are impairing their physical health.  And increased fear levels won’t keep you on track for your long term goals.  Explains the findings of annual Dalbar surveys over in the US, that show poor behavioural decisions by investors are the number one reason why their average returns are continually so poor.  And getting worse over the last decade.  Wonder why.

Good thinking requires concentration.  Which in turn requires uninterrupted time.  News items have been compared to free-floating radicals that interfere with clear thinking.  Smartphone and news addicts are constantly drawn to “bubblegum titbits” that catch their attention every few seconds.  They allow themselves to have their attention stolen by news “viruses.”  And because this behaviour disrupts your concentration, it weakens your understanding.  Ask yourself …

What were the top ten news worries from a month ago that are no longer even mentioned now?  Also, do you remember how the possibility of Trump being the Republican candidate was about to crash world stockmarkets?  Or how the nuclear spat between him and Haircut 100 from North Korea would lead to heavy losses for investors?  (never mind the millions of deaths).  And I’ve lost count of the “experts” who predicted Armageddon for the last nine years, but still dominate headlines.

Take “top US forecaster” Robert Wiedemer for example.  On Monday he said this when asked about the US economy   “The data is clear, 50% unemployment, a 90% stockmarket drop, and 100% annual inflation rate, starting as soon as next year.”  He said exactly that in January too.  Better sell up quickly then eh?  But what did Robert predict in 2012 ?…erm… “50% unemployment, a 90% stockmarket crash, and 100% annual inflation rate as soon as 2013.”

Guess what he predicted in 2013?  “50% unemployment, a 90% stockmarket crash, and 100% annual inflation rate starting in 2014.”  And in late 2014 along came the following… “50% unemployment, a 90% stockmarket crash, and 100% annual inflation rate, starting 2016.”  But apparently in 2006 he predicted the financial crisis of 2008.  One lucky coin toss perchance?

And intelligence or industry experience makes no difference if you’re a news junkie and chase “the latest hot stock” especially if you leverage (borrow) to do so.  Which probably explains why in 2010 just after the Financial Crisis a quiet wee old lady called Grace, orphaned early, who had a simple secretary’s job, and who rarely read the news died aged 100 with a $7 million portfolio.  And why the very next day, Richard, from a wealthy family, with a Harvard MBA and who was a leading light on Wall Street filed for personal bankruptcy, wiped out by poor behavioural financial decisions.

After the 25th of May thanks to interfering laws of “privacy” passed by the EU, we will be unable to share our monthly muses with you as we’ve done since 2005 unless you give us fresh permission.  A request for such permission will be sent to you shortly.  So if you’d like to continue with our antidote thoughts and don’t fancy having your wealth and health go “off-piste” please reply favourably.  And do remember to switch off your iPhone and “Bad News at Ten.”  But in case this is the last LFL you decide to receive, thank you so much for reading the others.  I really appreciate it.

alan-steel
Author
Alan Steel
Chairman
This letter is the personal view of Alan Steel. Please check the appropriateness to your individual position with your advisor before taking or refraining from any action.

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