How to be Mindful of the Media

24th August 2012

Despite the book only being shut on the Leveson Inquiry this summer, the pages of the most popular nationals are back to their usual tactics, with the publishing of Prince Harry's nakedness the latest example.

Yet it's not just the debate over the privacy of those in the public eye that's again a hot topic – trust in the media is also under threat when it comes to establishing which news reports are real and which are rumour.

We may revel in a country which allows free press, but given endless media outlets, from blogs and social sites to newspapers and TV, we're constantly bombarded with not only conflicting reports, but dubious ‘fact'. Are we simply faced with a perpetual echo-chamber, with one story leading to a swift storm?

Take a prime example that's doing the rounds today. Has China embarked on a massive $1.1 trillion stimulus plan to boost cooling growth? Of course, if true, this is huge, but while Reddit points towards one report, the FT casts doubt on the validity of the news. Yet whether fact or fiction, this will soon be all over the net.

What can we believe?

For the second time in a decade, the believability ratings for major news organisations have suffered declines, according to a new survey.

Positive believability ratings have fallen significantly for nine of 13 news organizations tested, according to the Pew Research Center for the People & the Press report.

This follows a similar downturn in positive believability ratings that occurred between 2002 and 2004.

Overall, the media's believability has fallen by a hefty 15 points, from 71% to 56%, in ten years. In that time, the believability of every institution but local news and local newspapers has fallen by double digits, adds the Huffington Post. So perhaps we're only willing to believe what's on our doorstep.

Its latest national survey signals that "the falloff in credibility affects news organizations in most sectors: national newspapers, such as The New York Times and USA Today, all three cable news outlets, as well as the broadcast TV networks and NPR."

While 56% of those interviewed had "positive" opinions about the news outlets' believability, 44% had "negative" opinions.

But it's not a surprise that people have soured on the media. In recent weeks, both television news and the political press have been roundly panned in polls, says the Huffington Post. It's easy to get caught up in the media storm.

Edward Hocknell, former partner of asset manager Baillie Gifford, says on his Mindful Money Blog: "It seems to me that the greatest enemy of successful investment is ‘events'. We are all participants in an endless parade of happenings, which, being human, we continuously try to integrate into our world view.

"The modern media makes the problem much worse, of course, with ‘news' being crafted to grab our attention. It is said that in the 1930s a BBC radio announcer solemnly told the nation: "Good evening. There is no news." Those days are long gone."

But the problem is the pursuit of profit over truth – particularly during a recession.

Surprisingly, in a speech seeking to distance herself from woes caused by the phone-hacking row, Elisabeth Murdoch, daughter of media baron Rupert Murdoch, rejected the profit-seeking values espoused by her brother James Murdoch and father.

Recalling James Murdoch's MacTaggart Lecture three years ago, which he ended by stating that profit was the only reliable guarantor of independence, Murdoch said, "James was right that if you remove profit, then independence is massively challenged but I think that he left something out: the reason his statement sat so uncomfortably is that profit without purpose is a recipe for disaster."

Perhaps the key is to regard reports with the suspicion they deserve, until validated. Beware of what's misleading and what's not, and keep your wits about you. This is the key to successful investing.

As Hocknell says perhaps it's the "boring, underreported – and very helpful" events that are most useful for those planning where to put their money.

 

More on Mindful Money

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Does the LIBOR scandal really matter? Well, the media certainly thinks so

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