Markets in the age of (mis) information
Power has always known the potential of propaganda, but never before have we known the impact of decentralised masses of data. The age of information is starting to show us now, in markets, what we’ve been sleepwalking into.
He points out that 11,000 people died from the Ebola outbreak in West Africa in 2014. However, the disruption caused to the global economy was much less than with COVID-19, even in its early stages, because of the differences in population density and the impact to global supply chains.
Creighton also counsels to consider the full economic context of a piece of news to judge how harshly markets will be impacted.
In the 2003 outbreak of the SARS virus, GDP in China fell by more than 2 per cent in the June quarter15.
Day in and day out... we uncritically accept virtually all of the communication messages we receive as ‘honest.’ We all are perceptually blind to deception. We are hardwired to be duped.”
- Timothy Levine
But that came at a time when the economic backdrop was already weak, recovering from the early 2000s recession which saw the collapse of Enron, bursting of the tech bubble and the September 11 terrorist attacks.
“A little situational awareness and rational thought can provide a timely filter,” he says. “This is critically important when making investment decisions and analysis.”
Who can you trust?
AMP Capital focuses on monitoring known credible sources. For viral outbreaks, sources like the World Health Organization and credible institutions such as the London School of Hygiene and Tropical Medicine and the Imperial College London represent trusted outlets.
“With the benefit of a tried and true investment process and an ability to identify the facts that matter, we can get on with doing what we do best: growing and guarding our client’s capital,” says Creighton.
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