Investors Plagued by “Continuous Partial Attention”

I never miss a monthly issue of the Mutual Fund Observer, one of the most comprehensive, well put-together looks at the money management game you’ll find anywhere. As such, I was thrilled to see my new book Clash of the Financial Pundits mentioned by the eminent Professor David Snowball. He cite’s Tadas Viskanta’s take on the subject as well, read that here

***

You wouldn’t imagine that those of us who try to communicate for a vocation might argue that you need to read (watch and listen) less, rather than more but that is the position that several of us tend toward.

Tadas Viskanta , proprietor of the very fine Abnormal Returns blog, calls for “a news diet” in his book, Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere (2012).  He argues:

A media diet, as practiced by Nassim Taleb, is a conscious effort to decrease the amount of media we consume. Most of what we consume is “empty calories.” Most of it has little information value and can only serve to crowd out other more interesting and informative sources.

That’s all consistent with Barry Ritzholz’s argument that the stuff which makes great and tingly headlines – Black Swans, imminent crashes, zombie apocalypses – aren’t what hurts the average investor most. We’re hurt most, he says during a presentation at the FPA NorCal Conference in 2014, by the slow drip, drip, drip of mistakes: high expenses, impulsive trading and performance chasing. None of which is really news.

Josh Brown, who writes under the moniker The Reformed Broker at a blog of the same name, disagrees.  One chapter of this new book The Clash of the Financial Pundits (2014)is entitled “The Myth of the Media Diet.”  Brown argues that we have no more ability to consistently abstain from news than we have to consistently abstain from sugary treats.  In his mind, the effort of suppressing the urge in the first place just leads to cheating and then a return, unreformed, to our original destructive habits: “A true media diet virtually assures an overreaction to market volatility and expert prognostication once the dieter returns to the flashing lights and headlines.”  He argues that we need to better understand the financial media in order to keep intelligently informed, rather than entirely pickled in the daily brew.

And Snowball’s take on it all?

I actually teach about this stuff for a living, from News Literacy to Communication and Emerging Technologies. My best reading of the research supports the notion that we’ve become victims of continuous partial attention. There are so many ways of reaching us and we’re so often judged by the speed of our response (my students tell me that five minutes is the longest you can wait before responding to text without giving offense), that we’re continually dividing our attention between the task at hand and a steady stream of incoming chatter. (15% of us have interrupted sex to take a cellphone call while a third text while driving.) It’s pervasive enough that there are now reports in the medical literature of sleep-texting; that is, hearing an incoming text while asleep, rousing just enough to respond and then returning to sleep without later knowing that any of this had happened. We are, in short, training ourselves to be distracted, unsure and unfocused.

Fortunately, we can also retrain ourselves for become more focused. Focus requires discipline; not “browsing” or “link-hopping,” but regular, structured attention. In general, I pay no attention to “the news” except during two narrow windows each day (roughly, the morning when I have coffee and read two newspapers and during evening commutes). During those windows, I listen to NPR News which – so far as I can determine – has the most consistently thoughtful, in-depth journalism around.

But beyond that, I do try to practice paying intense and undivided attention to the stuff that’s actually important: I neither take and make calls during my son’s ballgames, I have no browser open when my students come for advice, and I seek no distraction greater than jazz when I’m reading a book.

It’s not smug self-indulgence, dear friends. It’s survival. I really want to embrace my life, not wander distractedly through it. For investors, that means making fewer, more thoughtful decisions and learning to trust that you’ve gotten it right rather than second-guessing yourself throughout the day and night.

***

Sign up for MFO’s monthly email here:

Mutual Fund Observer

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. 激光脫毛價錢 commented on Sep 11

    Title

    […]just beneath, are several totally not associated sites to ours, on the other hand, they’re surely really worth going over[…]

  2. 永久脫毛 commented on Sep 12

    Title

    […]Every the moment inside a though we decide on blogs that we study. Listed beneath are the latest internet sites that we opt for […]

  3. 激光脫毛邊間好 commented on Sep 12

    Title

    […]the time to study or pay a visit to the subject material or web pages we have linked to beneath the[…]

  4. Dr. Robert Smith Newcastle commented on Sep 12

    Title

    […]check beneath, are some completely unrelated websites to ours, on the other hand, they may be most trustworthy sources that we use[…]

  5. 激光脫毛邊間好 commented on Sep 12

    Title

    […]usually posts some quite interesting stuff like this. If you’re new to this site[…]

  6. 比堅尼脫毛 commented on Sep 12

    Title

    […]Every when in a even though we select blogs that we study. Listed below would be the newest web pages that we opt for […]

  7. Dr. Robert Smith Newcastle commented on Sep 12

    Title

    […]we came across a cool web site that you simply may well enjoy. Take a look when you want[…]

  8. 激光脫毛邊間好 commented on Sep 12

    Title

    […]although internet websites we backlink to beneath are considerably not associated to ours, we really feel they may be essentially worth a go by way of, so have a look[…]

  9. Dr. Robert Smith Newcastle commented on Sep 12

    Title

    […]usually posts some quite fascinating stuff like this. If you are new to this site[…]

  10. BBstyles.net commented on Sep 13

    Title

    […]here are some hyperlinks to websites that we link to because we believe they are worth visiting[…]

  11. money clip commented on Sep 13

    Title

    […]although web-sites we backlink to beneath are considerably not related to ours, we really feel they’re really really worth a go by, so possess a look[…]

  12. www.megaprezentyslubne.wordpress.com commented on Sep 13

    Title

    […]just beneath, are many totally not connected websites to ours, on the other hand, they may be certainly really worth going over[…]