At The Money: Filtering Noisy News

How can investors find usable signal amidst all of the outrageous, algorithm-driven, clickbait? Noisy headlines can be a distraction from your long-term goals. Michael Hiltzik covers business for the Los Angeles Times, is a two-time winner of the Gerald Loeb Award and has authored numerous books on business. Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:31Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 1:13Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:54Speaker 02

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• 2:32Speaker 03

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• 2:55Barry Ritholtz?

  Investors face a flood of noisy news, social media, TV, radio, and more. None of it is tailored to you in particular, and much of it appears to be outrageous algo-driven clickbait. What's an investor supposed to do? To help us navigate this, let's bring in Pulitzer Prize-winning reporter Michael Hiltzik. He covers business for the Los Angeles Times. He's a two-time winner of the Gerald Loeb Award, as well as the author of numerous books on finance. So, Michael, let's start with this endless sea of noise. How do you navigate this? How do you prioritize what's important and what's not?

• 3:41Speaker 05

  Well, you know, it used to be said that newspaper readers know how to read their newspaper. You know, they sort of assess what they see there, you know, how it conforms to their own worldviews, how it conforms to what they see in the outside wide world.

• 4:01Speaker 05

  Of reality. And I think that's probably more important now than it ever has been before. Newspaper reports of data are always second order reports. A reporter who's looked at the data or an editor has dropped a page or sent an email and said, you know, do something on this report from this, that, or the other. And I think you always have to assess the source as we've talked about. You know, if we're talking about a trade organization, well, a trade organization is basically

• 4:41Speaker 05

  a PR organization and it's going to put its own spin on whatever numbers it cooks up. And sometimes it puts spin on numbers even before they're cooked up. If a trade organization is citing a study from a supposedly independent group, I want to know if they commissioned the study or who commissioned it. And that's a mixture part of my assessment. And I always ask, you know, if I'm calling lobbyists and saying, you know, you just cited this, you know, supposedly third-party analysis. You know, is it yours? Did you commission this? And, you know, if they're honest, they'll, they'll tell me.

• 5:25Speaker 05

  I just, it was just one sound, you know, into my email box, I think just the other day. And, and I've asked, but haven't gotten a reply. So, so that's, that's very important. And I think readers have to understand that more than ever before, certainly, you know, more than in my long career. Reporters are overworked. They don't have the time to do their homework. So they will basically take a press release from some data source and

• 5:59Speaker 05

  parrot it, regurgitate it. So I think it's important for readers to do what I do, which is to check the source. And if they can, go to the raw material and make a judgment for themselves. Intelligent investors should be able to do that.

• 6:15Barry Ritholtz?

  So, so that raises an obvious question. How do you tell which sources are trustworthy? Who do you put on your all-star list? Who do you eliminate?

• 6:26Speaker 05

  Well, there are a few sources, economic sources were on my all-star list. You know, you and your folks you know, because I quote you with some frequency. There are other organizations that have shown, you know, through the test of time to have been, to have integrity in how they interpret data.

• 6:47Speaker 05

  And then there were some where you just want to factor in what you know about their ideology, their funders, their history, and that just, you know, those simple inquiries will tell you a lot about how you want to assess information that comes at you from all these sources.

• 7:11Barry Ritholtz?

  You mentioned reporters are pressed for time, so are investors. You're kind of hinting at, hey, this requires some time, effort, and work in order to figure out what is a credible source of reliable news and what is a little more, let's just call it unreliable.

• 7:34Speaker 05

  Well, you know, I think I remember, you know, reading Andy Tobias's book, you know, probably one of its earliest incarnations, where he said, you know, what do you do if a broker comes to you, you know, cold call or someone you know and pitches an investment for you? And what his advice was to say, well, you know, don't invest in that investment, but see how it does. And if it's done well, then maybe you want to listen to this guy or cow a little bit more closely the next time. And I think that that's sort of a good idea more generally.

• 8:17Speaker 05

  You know, some reports will be refuted or debunked fairly quickly. And some of these sources will compile a record of inaccuracy or dishonesty.

• 8:32Speaker 05

  And some will compile the record of reliability and it takes time, it takes attention. And I think investors like readers and reporters need to do their homework and we just see that be being more and more difficult or just happening a lot less than it than it used to.

• 8:51Barry Ritholtz?

  I've been noticing what, at least to me, it seems like more than ever anecdotes and one-off stories and narrative tales, they just seem to be increasingly popular. How do you navigate through what is a compelling story? My my mathy friends always say N equals one. All right. So you have not a data series, but that's one anecdote. How do you how do you manage that?

• 9:18Speaker 05

  That's right. And sometimes the the N one is is oneself. So, yeah, well, um,

• 9:29Speaker 05

  look, basically, um, I've always been sort of averse to man on the street stories because, you know, a man on the street or a woman on the street, that's that is that is an N equals one. And you really have no idea what you can't really always tell what questions have been asked, what this person knows. We've certainly seen, you know, certainly during the inflation era under the last few years, we saw a lot of interviews with families in which they talked about how much they're spending on this or that commodity or or

• 10:10Speaker 05

  produce and and got it totally wrong. And so I think that people can sort of compare what they're reading to their own experience. And if it's really at odds, that that's important to keep in mind. So I think. I mean, I've gone, you know, I've been assigned to do man on the street stories, but you know, when they work, it's because you have a narrow subject and you are dealing with people who are in a position to know the answers to the questions you are talking about, but sort of throwing in, you know, somebody who's standing online or, you know,

• 10:54Speaker 05

  I used to say, I was always suspicious of stories that quoted the driver who brought the reporter from the airport to the first-class hotel in town. And we used to see that when I was in Africa, you know, I could tell, you know, the chauffeur, you know, sometimes, you know, was labeled to hide. But yeah, so you want to make sure that, you know, if there's, if there are interviews with individuals or families or couples, that there's more than one and that they seem to actually know what they're talking about. And, and they're talking about their own experiences and that they sound plausible.

• 11:38Speaker 05

  So these are all, you know, the sort of tests that we have to conduct in our, in our daily lives.

• 11:45Barry Ritholtz?

  What about social media? How do we avoid the worst aspects of algorithmic hype that seems to work its way into mainstream media as well?

• 11:56Speaker 05

  Yeah, well, certainly mainstream media stories that rely on social media sourcing are very suspect. Social media, look, you know, I was always a fan of Twitter. I would, I still do, you know, I still am a fan. I think Twitter, you know, for all its faults, still has a critical mass that alternatives like

• 12:24Speaker 05

  Uh, blue sky just haven't quite reached. Um, so, uh, you know, with, with X, uh, as we call it, I think you can sort of wean out the, the wild nonsense. Um, I always liked X because I could curate my, uh, my tweet, uh, uh, timeline, um, and rely on sources on that platform that, that I had come to know. It's more and more difficult now and it's harder to, uh, sort of, uh, you know, get rid of, uh, you know, some of this cross. But, um,

• 13:06Speaker 05

  you know, there are websites that, uh, that I go back to over and over again. They're not all economic websites. Sometimes they're, um, uh, writers who think the way I do. So I, you know, I get reinforcement where, where I need it. Um, and then there were some that I just ignore. Um, you know, I'm, you know, I have more time to myself because I'm not paying any attention to a lot of this stuff.

• 13:33Barry Ritholtz?

  Yeah, I found on Twitter, curating your own lists on different topics. For me, it's the economy, it's data and analytics, it's behavioral finance. There are experts out there talking about subjects that I like. And at least i- i- it's, there's some filtering process by creating a list. It's not going to stop spam and other junk stuff from coming through. Um, all right. So we're talking about social media. I guess if we're talking about news and problems, we have to discuss AI, not just the hallucination, but the risk that that news story you're reading

• 14:14Barry Ritholtz?

  is literally fake news, just something created by AI cheaply. How do we navigate a world where AI is cranking out a lot of artificial intelligence is cranking out a lot of news that isn't exactly following the rules of journalism?

• 14:37Speaker 05

  Yeah, I should tell you that I am an AI skeptic. I think, you know, some large percentage of AI claims by developers and by clients is marketing in the same way that, you know, dot com used to be the big marketing trope 25 years ago now. And so a lot of what is pitched as AI is not really AI and none of it is intelligence. I'm not sure, I'm of two minds about whether people are going to become better at detecting

• 15:20Speaker 05

  AI creation or worse. I think at the moment, there are giveaways that anyone can see, you know, in the, sometimes in the language that's used, sometimes in the images that are created, we see this over and over again, just, you know, clearly AI hallucinations. So, you know, right now, there's an AI craze in industry and including in the news industry. And I think that's going to be a problem. I think it's going to go bad. And I think, you know, relying on AI is going to be something that, you know, when we look

• 16:05Speaker 05

  at it in the rearview mirror, we're going to say, what were we thinking? You know, why did we spend any money on this?

• 16:11Barry Ritholtz?

  So to wrap up, apply common sense to your consumption of news. Figure out who's trustworthy, what sources are accurate. Put the time and effort in to identifying who's worthy of your time and trust. Beware of social media, be wary of AI, and don't be afraid to follow people who have bylines that you trust rather than just blindly paying attention to any particular media source. It's worth understanding what you're consuming and why, and staying on the right side of accuracy. I'm Barry Ritholtz, you're listening to Bloomberg's At the Money.

• 17:01Speaker 02

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• 18:07Speaker 07

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