Worried about the rise of fake news? You have no idea how fake news was in the past
16-Oct-2019 •Dhirendra Kumar
There seems to be a widespread idea that there's a great deal of fake news in the world, that this is mostly an effect of the internet, and that this fake news is growing and something should be done about it. The solution that is commonly suggested is that companies like Google, Twitter and Facebook should be censoring practically everything on the internet. Of course, the word 'censor' is not used. People who promote this fake news narrative usually say that these companies must not help fake news spread, but that's just a euphemistic way of saying that these companies must impose a censorship. What a ridiculous idea that we are voluntarily demanding that a bunch of American, for-profit companies should censor what we say.
Anyhow, I'm not going to comment directly on other walks of life, but in investing and in business-related news, which is what I've been watching closely all my life, I find this fake news narrative to be complete fake news. There are two parts to this realisation. One, high quality information is easily available today. Two, there was a lot of fake news earlier too, but because there was no internet we were unable to vet it and by and large, used to swallow it whole. Even worse, on so many important things there was no news at all, meaning that it was almost impossible to discover crucial pieces of information.
The fakeness of news in the past was brought home to me when I read a book called Truth: A Brief History of Total Bullsh*t, by an author named Tom Phillips. This book manages to be simultaneously hilarious as well as frightening, if only to understand that in the not too distant past, most news was fake.
As for the fakeness of business and investment related news that I have seen, here are a couple of interesting examples. Some twenty five years ago, at the height of one of the IPO manias in India, a colleague of mine attended a sales-pitch by a man who was one of the leading 'IPO arrangers' of the time. As part of narrating his past exploits, the IPO artist displayed a thick file of news clippings that he had gotten published in the media. All of the news in that file was either an outright fake or heavily exaggerated, and every hallowed name of Indian media was well-represented in that file.
Does this happen today? I don't know, but in any case it matters far less. The reason is that it's far easier for any news consumer to verify and cross-check facts, both in the mainstream media and just generally on social media. There's so much more information that has to be revealed statutorily, and so much more that has to be reported to stock exchanges and regulators, most of which is just a Google search away.
My other example is about mutual fund NAVs. Today, the Net Asset Values of almost 10,000 plans of Indian mutual funds are available at the end of each day, publicly, on the web. Sites like my Value Research Online pick up these NAVs and can tell users about the updated status of their investments within minutes of all NAVs being declared. Back when I started as a mutual fund analyst, NAVs were very much in the 'no news is fake news' stage. NAVs were calculated once every three months and after they were calculated, mutual funds had a further 30 days to reveal them publicly. This revelation could be done by placing a notice in any daily newspaper in the country. For reasons that are not hard to imagine, this would inevitably be a now-defunct Mumbai-based evening tabloid named 'Afternoon Despatch & Courier' which was unknown and unavailable elsewhere in the country!
The reality is that compared to even the recent past, we are living in a golden age of knowledge and transparency. The only people complaining are those who used to be the gatekeepers of information earlier, or those who want to censor views that they do not like. All this talk of fake news is itself nothing but fake news.