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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

Twitter: The carnival barker of investing

By Morgan Housel





We have more information than ever. More data. More analysis. More opinions.

But does any of it make us better investors?


JewishWorldReview.com | When asked what I read, I always plug Twitter. It is one of the most effective communication devices ever invented, I usually say, with no exaggeration.

Twitter has become so important to finance that it is taking over the role of the Wall Street analyst. As news broke of the Cyprus bailout last month, Twitter was a mile ahead of Wall Street. Joe Weisenthal of Business Insider wrote:


"Twitter is increasingly equaling or surpassing the value of traditional sell-side research from Wall Street analysts ... Because the (Cyprus) news was so surprising, and because there's so little time between when the bailout was announced early Saturday morning, and when trading begins Sunday evening, there's been an aggressive thirst for information and analysis on what it all means. But the sell-side has been fairly slow, and the Twittersphere has come to the rescue."


He is right. When big financial news is breaking, all the money in the world can't buy the information streaming from Twitter's free iPhone app. It is indispensable.

But there is another side of Twitter, as Washington Post columnist Ezra Klein recently wrote:


"Toward the end of the election, I pretty much stopped reading Twitter altogether. It improved my life, and the quality of my work. There was so much partisan sniping and gaffe-driven garbage that reading almost anything but Twitter was a huge improvement in the quality of the information I consumed."


Most forms of information are slow-moving, Klein writes. "If I neglect my RSS feed today, the posts will still be there tomorrow," he says. "The same is true for the books I'm reading, the magazines piled on my nightstand, the tabs open in my browser." Ditto for conventional journalism. If I check WSJ.com at 4 a.m. or 9 a.m. or noon, I will find the same stories. There is no rush.


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But on Twitter, not checking your feed for an hour can mean missing something important. Since there's no easy way to see what everyone you follow has tweeted in the last day -- to say nothing of the last week -- the best way to stay on top of what's important is to become a Twitter maniac, glued to the screen all day. It's as if you don't know when your favorite TV show will air, and there's no way to record it when it does. Not wanting to miss it, you sit in front of the TV all day, waiting for it to come on.

But that means having to sit through a lot of soap operas and realty TV shows. Which is exactly how Twitter can feel sometimes. And I feel it's getting worse.

In decades past, top investors wrote their clients once a quarter, maybe even once a year. Top newspaper columnists wrote once or twice a week.

Twitter has sent those expectations through the roof, with Twitter stars penning 100 updates per day -- not because they are teeming with insight, but because quantity is how you stay relevant in our hypercompetitive media. I follow 411 people on Twitter -- not a lot by any stretch -- yet as I write this, my feed is filling up with about 15 new tweets per minute. And I'd venture that 90 percent of the tweets on my feed come from 10 percent of the people I follow.

But I don't need to know anything remotely close to 15 new pieces of information per minute. So finding something meaningful on Twitter often means having to swim through drivel, gossip and hyperbole, no matter how selective you are in choosing who to follow.

We have more information than ever. More data. More analysis. More opinions.

But does any of it make us better investors?

Is there any evidence that the investor 20 years ago who read The Wall Street Journal in the morning and watched Louis Rukeyser at night was worse off than today's hyper-connected investors, the vast majority of whom underperform index funds? Is there any evidence that the age of Twitter has made us better at predicting what the economy will do next, or where the market might be heading?

I know of none. What I do know is that several psychologists, notably Stuart Oskamp, have shown that when given more information, confidence in a prediction increases while the accuracy of that prediction stays the same, or even declines.

Twitter takes this to a new level. It treats investing as something that is fast and emotional. Something that needs 24/7 vigilance. It makes everything that we know leads to better investing results -- selectivity, emotional stability, independent thinking and a long-term outlook -- harder to achieve. I will even propose that the average investor 20 years ago was more informed than the average investor today, simply because the investor 20 years ago was exposed to less chaff. This is where Taleb's wisdom comes in: "The calamity of the information age is that the toxicity of data increases much faster than its benefits."

So, I'm taking a Twitter break for a week. We'll see how much I miss it, whether I feel less informed or if I find a lack of good things to read. I suspect none will be true.

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Comment by clicking here.

Morgan Housel, a columnist at The Motley Fool, is a two-time winner, Best in Business award, Society of American Business Editors and Writers and Best in Business 2012, Columbia Journalism Review.


Previously:


Warning: Don't waste your capital being fooled by profit prophets

25 important things to remember as an investor

New paradigm for both drivers and car companies

Biases that make you a bad investor

Nine financial rules you should never forget

Gaining from financial destruction

How to read financial news

Housing: Partying like it's 1925

A rebuttal to student loan horror stories

CONGRATULATIONS: We just saved half a trillion dollars

End this crazy tax: It will boost the economy

Medicare: A dangerously good deal

Economic future looks bright

The Biggest Threat to Your Portfolio (It's Not What You Think)

Bond Market Bull Run dead at 30



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