The Zen of reading current news comes from gathering correct information without being gaslighted by misinformation, news omissions, falsehoods, exaggerations, and self-interested biases. Gaslighting is defined as “the act or practice of grossly misleading someone, especially for one’s own advantage”.
There is the potential for gaslighting from any narrative, so the focus must be on the data not the story. Read a story and ask for the data. The value of information is impacted by the chance that there is a "lemon" in the story. Gaslighting distorts the value of all narrative information because you don't know for sure what information is true.
The history of the word, "gaslight" is very interesting. Hat-tip to Bob Seawright on his sub-stack essay "Financial Gaslighting" who focuses on the hedge fund marketing. It may have come into use through the play and movie "Gaslight" where an evil husband distorts reality to drive his wife mad. He would lower the gaslights and when asked by his wife whether the room was darker, he would answer that nothing changed. Belief the messenger not your own senses. In the financial world, some want you to believe the words not the data.
SBF just did not know what was going on with FTX because he was so busy. Raising interest rates 500 bp is unlikely to have severe consequences. The Inflation Reduction Act will reduce inflation. We could do this to news every day.
The topic has a much broader importance then saying an investor should be wary of narrative. It has an impact on fundamental discretionary and quant investing. Focusing on the quant data reduces the chance for investment gaslighting.
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