Facebook has found what appears to be a Russian plot to interfere with the 2018 mid-term elections. This is the breaking news of the week. What has become obvious to most observers is that Russia is not trying to influence the results of elections as much as they are trying to further divide our already divided electorate.
Of course this is unprecedented, except that it probably isn’t. Creating fake news about one’s political opponents has been around at least since the founding of our nation and probably a lot longer. Benjamin Franklin used his printing press to help spread some fake news, as did his political rivals. My ancient history/Shakespeare is a little rusty, but weren’t there some false rumors involved in the eventual assassination of Julius Caesar by a crowd of conspirators, including his good friend Brutus? Et tu, Brute?
I certainly don’t mean to downplay the seriousness of Russia meddling in our politics, but it does seem to me that there is an easy solution to all of this: Bring back common sense, and don’t believe everything you read. I would add to this one further instruction: …especially if you want to believe it.
One of the benefits of spending my adult life in the investing world is that I get to spend a lot of time learning about how humans make decisions. Investing is, after all, about making decisions. Most people think decisions are made by carefully analyzing data and using our reasoning skills to identify the right path. To invest or not to invest, or to vote for this candidate over that one.
This is not actually how humans make decisions, unfortunately. We make decisions mostly with our emotions, and then we look for facts that support the decision that we have already made. When data comes in that supports what we want to believe, then we accept it as true. If, on the other hand, we receive data that runs counter to our beliefs, then we reject it as false. Most in our society have long held the outlook that we are intelligent and everyone who disagrees with us is stupid. The troubling thing about our politics today is that we seem to be drifting toward a more serious view of, “we are virtuous and anyone who disagrees with us is evil.”
One can’t do this in my field, because the measuring stick for our decisions is absolute. An investment either worked out well or it didn’t. This blunt reality makes it harder to lie to oneself. That is a great lesson, but most people never learn it.
As a result, when a Trump supporter reads some story which makes Trump look good and his opponents look bad, they tend to believe it; and when someone who does not care for Trump reads something that makes him look bad, they tend to believe it. These stories can both be fact, or they might both be fiction. How are we supposed to know?
Simple: Be skeptical, especially when you hear something that you would like to be true. Question the source. Likewise, don’t just dismiss those who disagree. They are not any more stupid than we are, after all. They might even be correct about some things.
In her book, Thinking in Bets, professional gambler Annie Duke suggests putting some money on the line. Investors learn to overcome their natural bias because if they don’t, they lose money. The same is true for gamblers. So, put some money on the line. The next time a friend tells you that the guy running for Congress in your district is actually a member of an alien race trying to take over planet earth…instead of just believing it, ask them how much they are willing to bet. Just like we did when we were kids. If they hesitate, then that will tell you if it is truth, or fake news.
Warm regards,
Chuck Osborne
