Twenty years ago information was plentiful by any historical measure, though it paled in comparison to the amount and accessibility of information in today’s world. Today information is being captured and fed to us at every turn. The smart phone and social media revolution has helped propel a new paradigm. For investors this new paradigm is as much of a detriment as it is a benefit. It all depends on your the development of your mental faculties.
If we put ourselves back in 1997 when the Internet was young and we were using AOL, Compuserve or utilizing Netscape Navigator to surf the Internet, it would be hard to fathom our current information bloat. In that period we were fighting to connect to the Internet and when we did it was predominately via dial-up modems. In those days 56k dial-up was considered fast. The very structure of the Internet was different. For investors looking to do research, the story was the same. A few prominent sites, such as Market Watch, provided quotes and basic financial information on stocks. What we had in digital form was an expansion of what we could gain from reading the business section of any large newspaper.
Today the need for a strong filter of information within oneself is paramount. When researching any moderately covered stock, you can find arguments for and against ownership. Opinions are everywhere from social media postings on Twitter to blog entries from sites such as this one. Anyone can express their opinion and everyone does express their opinion. A filter screening for quality is absent. Therefore, you must install a quality control filter within your mind. Without a filter you’re destine to be confused, paralyzed with information overload, and sent on a manic roller coaster of polarizing opinions.
We live in a very different world today than we did one or two decades ago. For investors this is especially true. We must take it upon ourselves to be more disciplined than ever because an excessive amount of voices exist telling us to walk when we want to run and telling us to run when we want to walk. Discipline is difficult in a sea of confusion. Our job is to cut through the noise to minimize the sources of confusion.