Investors beware: “News” impairs your mental and physical wellbeing
In my previous wire, I showed that overconsumption of news misinforms investors and wastes their time. But that’s not all: in this article, I cite evidence that overconsumption – particularly of news’ online and broadcast variants – hinders thinking. It doesn’t just cause your investment returns to suffer: even worse, it also impairs your mental and physical health.
Like the ingestion of junk food, the intake of junk information in anything other than occasional small doses can be harmful. Investors should therefore resolve to consume a healthier diet – one that limits the intake of anecdotal (and therefore probably irrelevant, invalid or unreliable) data and information, and increases the consumption of tried-and-true knowledge and wisdom. If forced to choose between Ben Graham’s The Intelligent Investor and access to online news and opinion sites, you shouldn’t hesitate: keep the book and shun the sites!
Junk Food and Junk Information
During the past couple of decades, many people have recognised the risks (diabetes, obesity, etc.) that stem from over-consumption of junk food and under-consumption of wholesome food. Some people have mitigated these risks by changing their diets.
Alas, few comprehend that news is to the mind what glucose is to the body. If sugary drinks are junk food, then news is junk information. Like sucrose, news is cheap, hard to resist and easy to ingest. Like the “sugar hit,” which is short-term stimulus but long-term poison, so too the consumption of news.
And like the junk food industry, so too mainstream and “social” media: they feed us what most people apparently want – tasty morsels of anecdote, babble, gossip and trivia. Like connoisseurs of junk food, “news junkies” experience little satiation. Quite the contrary: their appetite grows over time – and displaces worthy fare. The absorption of some of the canons of investment (not to mention Western philosophy, theology, science and literature!) requires considerable thinking – which requires time and effort. But people naturally love leisure; accordingly, they are normally as allergic to mental as to physical exertion. For that reason, they embrace news and information, and eschew knowledge and wisdom.
News Is Toxic to Your Mind and Body
It’s well known that stress weakens the immune system and inhibits the release of growth hormones. It also impairs digestion and increases susceptibility to infections. Other potential side-effects include anxiety, fear, aggression and desensitisation. Excessive consumption of news, in turn, puts mind and body into a state of chronic tension; indirectly, then, it impairs physical and mental health.
More than half of Americans, reported Time magazine (“Is It Bad for You to Read the News Constantly?” 19 May 2020),
say the news causes them stress, and many report feeling anxiety, fatigue or sleep loss as a result … Recent changes to the way everyone gets their news – coupled with the style of news that dominates today – may not be good for mental and even physical health. “The way that news is presented and the way that we access news has changed significantly over the last 15 to 20 years,” says Graham Davey, a professor emeritus of psychology at Sussex University in the UK and editor-in-chief of the Journal of Experimental Psychopathology. “These changes have often been detrimental to general mental health.”
On 4 September 2012, the Association for Psychological Science issued a press release entitled “Repeated Exposure to Media Images of Traumatic Events May Be Harmful to Mental and Physical Health.” It stated:
From 24-hour cable news to YouTube and Twitter, today’s mass media can turn local disasters into international events within minutes, transmitting the impact of a disaster far beyond those who are directly exposed. Many have wondered about the relationship between this kind of media exposure and viewers’ mental and physical health, but researchers can only really understand the effects of trauma-related media exposure if they begin following people before and continue to follow them over time.
This press release previewed an article that appeared shortly thereafter in Psychological Science. In the first research of its kind, its authors hypothesised that repeated exposure to distressing images in the media could have long-lasting negative consequences – not just for mental health but also for physical health. Such media exposure could result in a stress response that triggers various physiologic processes associated with increased health problems:
The results were striking. After taking pre-9/11 mental health, demographic characteristics, and lifetime trauma exposure into account, people who watched four or more hours of 9/11- or Iraq War-related television per day following each event were more likely to experience symptoms of acute stress. Furthermore, the effects of trauma-related media exposure lasted over time – frequent early exposure to 9/11-related television predicted posttraumatic stress symptoms and physical health problems two to three years later. Taken together, these findings provide persuasive evidence that widespread media coverage of terrorism and war may have harmful effects on mental and physical health over time.
Now ask yourself: if you remove “9/11” and “Iraq War” from the preceding paragraph, and replace them with “COVID-19,” “lockdown” and the like, would the effects upon mental and physical health be much different? Or even worse? That’s not a rhetorical question: the news industry’s gross bias and distortion throughout the COVID-19 pandemic has been systematically documented. Researchers at Dartmouth College and Brown University have analysed tens of thousands of news items about COVID-19 and found that major U.S. media outlets have overwhelmingly pushed negative narratives about the virus. Zero Hedge (“Dartmouth-Brown Study Documents Media’s Stoking ‘Vicious Circle Of Fear’ On COVID,” 28 March 2021) adds:
There’s little doubt excessive media negativity has contributed to public misunderstanding of the nature of the disease and the actual risk it poses to various segments of society. Consider one of study’s most glaring findings: Even when COVID-19 cases were falling nationally, … major media discussed rising caseloads 5.3 times as frequently as falling ones. The impact was evident: A June CBS News poll found a record number of Americans felt the fight against coronavirus was going badly. Of course, news of the poll was itself another negative story, feeding a media-facilitated vicious circle of fear.
… The easing of government restrictions reliably attracts negative media. Iowa governor Kim Reynolds’s lifting of the state’s mask mandate in early February sparked a wave of negative reporting and opinion pieces, and the Washington Post actually ran a piece titled “Welcome to Iowa: a State that Doesn’t Care If You Live or Die” … It’s as if mainstream journalists feel duty-bound to stoke COVID-19 fear, while paternalistically shielding us from welcome facts that could lead us to “let our guard down.” In doing so, they negligently disregard the collateral harm they do to mental health and our quality of life.
News Inhibits Thinking
Thinking requires concentration, and concentration requires uninterrupted quiet time. In contrast, the consumption of news requires little time or effort. As such, news isn’t merely tailor-made to interrupt thinking: it helps to make us intermittent and shallow thinkers. That’s because news degrades memory. Long-range memory’s capacity is nearly infinite, but working (short-term) memory is strictly limited to a bare minimum amount of information and knowledge. The path from short-term to long-term memory seems to be a choke-point in the brain, yet anything you want to understand thoroughly must past through it. If something disrupts this gateway, little will traverse it. Because news disrupts concentration, it weakens retention.
The impact of news consumed online is still worse. According to Nicholas Carr (“The Web Shatters Focus, Rewires Brains,” Wired Magazine, May 2010),
Research continues to show that people who read linear text comprehend more, remember more, and learn more than those who read text peppered with links. In a 2001 study, two scholars ... asked 70 people to read ... a short story ... One group read it in a traditional linear-text format; they’d read a passage and click the word next to move ahead. A second group read a version in which they had to click on highlighted words in the text to move ahead. It took the hypertext readers longer to read the document, and they were seven times more likely to say they found it confusing.
Another researcher requested that subjects read a passage of digital prose but varied the number of links appearing in it. She then gave to the readers a multiple-choice quiz, and asked that they write a summary of what they’d read. She found that comprehension declined as the number of links increased – whether or not people clicked on them. It seems that whenever a link appears, your brain must choose whether or not to click, which is itself distracting. Carr continued:
A 2007 scholarly review of hypertext experiments concluded that jumping between digital documents impedes understanding. And if links are bad for concentration and comprehension, it shouldn’t be surprising that more recent research suggests that links surrounded by images, videos, and advertisements could be even worse.
In a study published in the journal Media Psychology, researchers had more than 100 volunteers watch a presentation about the country of Mali, played through a Web browser. Some watched a text-only version. Others watched a version that incorporated video. Afterward, the subjects were quizzed on the material. Compared to the multimedia viewers, the text-only viewers answered significantly more questions correctly; they also found the presentation to be more interesting, more educational, more understandable, and more enjoyable.
Consumption of News Alters the Brain’s Structure
In one critical respect, news resembles an addictive drug. As “stories” develop, we naturally want to know how they ensue. With many arbitrary story lines in our heads, this curiosity is increasingly compelling and hard to ignore. Once you succumb to the habit of regularly checking the news, you are driven to check it ever more often. Your attention is fixated upon rapidly-evolving events, so you hunger for more information about them. Addicts crave more of an addictive substance to get their “hit” because they need more stimulation than non-addicts to reach a threshold of pleasure. If you set your attention on other things – like literature, science, art, bushwalking, history, learning a language, growing orchids or grooming your Alsatian – you’ll become more focused on those things.
Neurologists used to think that the brain’s capacity – the dense connections formed among the 100 billion or so neurons inside our skulls – is largely fixed by the time we reached adulthood. Today they doubt this is so. They increasingly agree that our brains are plastic: nerve cells routinely break old connections and form new ones. Accordingly, when we consume on-line news we reconfigure our brains. It reprograms us; hence our brain works differently – even when we’re not consuming news! And that’s dangerous.
The more news we consume, the more we exercise the neural circuits devoted to skimming and multitasking while ignoring those used to think deeply. Most heavy consumers of news – including those who were once avid readers of books – have lost the ability to absorb lengthy chains of reasoning. After a few pages they tire, their concentration lapses and they become restless. It’s not because they have aged or their schedules have become more crowded. It’s because the physical structure of their brains has changed. In the blunt words of Prof Michael Merzenich of the University of California at San Francisco, a pioneer in the field of neuroplasticity: “as we multi-task online, we are training our brains to pay attention to the crap” (see “Is the Internet Destroying Our Brains?” CIO Zone, 10 June 2010).
Implications for Investors
Consumption of news impairs physical and mental health – and thus the ability to think. Yet successful investing presupposes the capacity to think. Warren Buffett says of his daily work routine: “I just sit in my office and read all day.” He estimates that he spends 80% of his time reading and thinking. “You could hardly find a partnership in which two people settle on reading more hours of the day than in ours,” Charlie Munger adds. Buffett certainly reads newspapers; yet news seems to comprise a small percentage of his intake of information (or time he spends reading). When asked how to get smarter, Buffett once lifted a stack of company reports and said, “Read 500 pages like this every week. That’s how knowledge builds up, like compound interest.”
Deep reading and deep thinking are indistinguishable, and rigorous thinking is a necessary condition of sensible decision-making; accordingly, deep reading necessary precedes and accompanies successful investing. The consumption of news doesn’t just waste our time and mislead us: it alters the structure of the brain such that we become less able to think – and thereby invest sensibly and successfully.
What, then, to do? Just as you should avoid junk food, eschew junk information and stimulation. Scan headlines, ignore opinion pieces and prognostications about markets and the economy, and skim all articles about companies that interest you. As you develop expertise in some industries and sectors (nobody can cover the gamut), read carefully those articles, ASX releases, etc., within your sphere of competence – and in response to them, occasionally undertake your own research. But mostly read financial statements and company reports, as well as financial, economic and general history. That is, read voraciously but selectively. If you’ve lost it, regaining the capacity to concentrate and contemplate may require nothing less than a cold-turkey change to a news-free diet.
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After concluding an academic career, Chris founded Leithner & Co. in 1999. He is also the author of The Bourgeois Manifesto: The Robinson Crusoe Ethic versus the Distemper of Our Times (2017); The Evil Princes of Martin Place: The Reserve Bank of...