Bad news, it seems, is everywhere.
COVID-19 cases are spiking across the globe. Financial markets are getting hammered.
The United States’ botched exit from Afghanistan has the international media (yet again) gloating over the demise of the U.S. empire.
Tens of millions across the world are on their smartphones “doom scrolling” into a low-level depression.
I’ve been lucky this summer.
For the past few weeks, I’ve been hiding out in Hungary, which, despite its authoritarian political reputation, feels like one of the freest places in Europe.
You don’t have to wear masks.
You can have a drink at a pub without having to log in with a Big Brother “test and trace” tracking app (like in the U.K.).
The Hungarian media spares you the onslaught of daily statistics on COVID-19 cases and deaths.
Spending a few summer weeks free from the tyranny of the negative headline has been exhilarating.
Meanwhile, not much has changed in the U.K. The headlines are as negative as ever.
Government policy – dubbed “Project Fear” by the media – is chaotic and contradictory.
The Behavioural Insights Team – partly owned by the Cabinet Office and dedicated to “nudging” public opinion into submission – has lost the plot.
This state of play is ironic.
After all, the U.K.’s vaccination rate is among the highest in the world. The delta variant peaked there in mid-July.
The number of daily deaths from COVID-19 is now lower than the number for almost any other disease.
Yet when I return to the U.K., I will return to a world of relentless doom-mongering and expensive COVID tests.
The Reign of the Negative Headline
Scan any newspaper in any part of the world at any time and you’ll find disaster is looming on the horizon.
Whether it’s the latest political fiasco… a devastating natural catastrophe… apocalyptic climate change… or a global pandemic… the world is always coming apart at the seams.
Since taking off in the late 1800s, the modern mass media has had one rule: “If it bleeds, it leads.”
The COVID-19 pandemic was tailor-made for a tech-dominated, overcommunicated world like this one.
Today’s ubiquitous media – on our phones, laptops and cable news – keeps us in constant fear.
And Silicon Valley tech giants made it worse than ever before. Click on any COVID-related article today, and you can be sure that more articles will turn up on your news feed tomorrow.
What’s worse, you don’t even need to click on it. It’s enough for you to talk about it with a friend.
That’s because Google listens in on your conversations and feeds you stories about what you’ve been talking about. (Watch the Netflix documentary The Social Dilemma for more on this topic.)
I’ve stopped using Google unless absolutely necessary (I use DuckDuckGo instead). I rarely check Facebook. I all but ignore Twitter.
By limiting my exposure to the gloom and doom media, these small steps have made my life a bit less stressful.
A Reality Check
The relentless onslaught of bad news gives you the impression that the world has never been more chaotic, uncertain and unsafe…
As Alexander Green has written many times, the exact opposite is the case.
We are living longer, healthier lives with a higher standard of living than ever before.
The last pandemic that swept through the U.S. – the Spanish flu – claimed 25 million to 50 million lives globally.
The United States had a population of 103 million at the time (less than one-third of today’s population). A quarter of the population was infected, and the virus claimed 675,000 American lives.
Contrast that with today’s population of 331 million, 38 million cases and 646,000 deaths.
Today’s COVID-19 vaccines are miracles of modern science saving millions of lives.
Step back from the relentless onslaught of noise, and you’ll likely agree with Warren Buffett’s view. If you had the chance to choose any time and place in history to be born, the answer is always the same. “You’d pick today, and you would pick America.”
As conventional wisdom tells us, no one ever risked their life on a makeshift raft to escape to Cuba.
Implications for Investing
How do these insights relate to investing?
First, understand that most of the best investors are optimists.
Instead, we can attribute their success to their calm, measured and optimistic temperaments. Those are qualities worth emulating.
Second, you should recognize that most investors fall victim to media-induced pessimism. Stand ready to take advantage of the opportunities this presents.
Buffett speaks of taking advantage of Mr. Market’s mood swings. Templeton invested where the “outlook was the most miserable.”
Put another way, bad headlines are good news for long-term investors. After all, that’s when your favorite stocks go on sale.
We are yet again nearing that point, with the index closing at 23 on Friday.
The bottom line?
Despite the COVID-19 pandemic, the world is in a better state than it’s ever been.
As an investor, don’t fall prey to the tyranny of the negative headline. Instead, take advantage of it to grow your wealth.