STREET DOGS

The advent of financial news TV led to the mastering of the art of saying a tremendous lot of something when nothing needs to be said, says Morgan Housel at Collaborative Fund. Here is his advice for making sense of the overwhelming amount of financial content that we have today.

● Bucket everything into a category of relevance. There’s a hierarchy of news and information … good, relevant content is extremely rare. You should have no tolerance for gossip, rumours, uninformed opinions and anything that’s not relevant to you. Giving yourself permission to move on quickly provides more time to find something relevant.

● Read stuff you disagree with, written by people you respect. Modern financial media makes that hard, because no matter what you believe you can find a welldesigned blog that agrees with you, [while] the most attractive opposing views are written by idiots, amateurs and salesmen. You have to seek out opposing views from people whose thought process you respect.

● Read more than pure finance. Investing is not the study of finance. It’s the study of how humans behave with money. Rule of thumb: if it looks into how people behave in groups and respond to incentives, it’ll teach you something about investing.

● Old news is the best guide of how to treat current news. Old news teaches a few things: that forecasting markets is nearly impossible; that people will never stop believing in forecasts; and that the biggest news stories are, in hindsight, the ones no one was talking about with foresight.

● Understand that people play different games. A long-term investor doesn’t see things the way a trader does. A momentum investor thinks they’re both missing it. What’s important is that you don’t take your cues from someone writing about a game different to yours.