In the mass media, it's an age of hyperbole, exaggeration and bombast. If we at Value Research also believed in the current style of headlines, then the cover story of the October 2021 issue of Mutual Fund Insight would probably be 'Supercharge your investments with these four secrets!'
Instead, we are going with something mundane like 'Four money fixes you must not postpone'. There's no drama in the headline; it's dull. However, it has one big advantage over the shouting-from-rooftops style - it is accurate, and it's useful. It describes exactly what the story contains and what you should do. I firmly believe that this simple reality-based style is better, whether it's ideas or just information.
The reason why I'm saying all this is not just as a criticism of how the mass media presents what it has to say. If this was just a comment on the style of today's media language, it would not matter to you as an investor and I would not write about it on this page. The real reason is that this exaggeration misleads you. It conveys the wrong information because mislabelling how important any information is equivalent to misinformation. Misinformation in investment ideas is as harmful as mis-selling of investments.
If I pitch everything I say as the most important thing in your life, then pretty soon you will be de-sensitised to what's really important. If everyone is doing it all the time, you will not be able to distinguish between what is a life-and-death situation, what is important and what is mildly important. And of course, some things are irrelevant or just plain wrong, and that too is being said just to get some clicks and views. We see this a lot in not just personal finance but in every kind of issue, not the least in COVID.
In this cover story, the four points we are making are not some kind of earth-shaking secrets that are being revealed for the first time. They are obvious things that were probably already there at the back of your mind. Many of our long-time readers already know a lot about investing, likely more than most people who present themselves as experts in the media and on social media. The purpose of us doing cover stories is not to reveal some earth-shaking new technique but simply to point out things that should not get ignored for too long, better done now rather than later.
I see this more as a conversation between knowledgeable people. It's like a timely reminder from a friend about something that may have slipped your mind, rather than some kind of instructions that we are giving you. One of the reasons that exaggeration does not work well is that some of the most important things in investing are avoiding the wrong things and the mistakes rather than doing the best things. A couple of weeks ago, I quoted Charlie Munger's colourful statement, "I like people admitting they were complete stupid horses' asses. I know I'll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn."
Sounds easy, but being careful about mistakes necessarily involves being self-critical, of first admitting that one might be making a mistake. What's more, mistakes can involve doing something wrong, but everyone does something wrong all the time. Mistakes can also more often involve not doing or forgetting to do something right. Worse is the kind of mistake I still find myself making even after all these years: not getting around to doing something that I know needs to be done. That's the kind of thing that this non-exciting but very useful cover story is aimed at.
This editorial appeared in Mutual Fund Insight October 2021 issue. To read the cover story and other insightful analyses, columns and articles