We are living in a world of fake news.
As traditional media outlets fragment, and literally anyone can put out content to a global audience, the traditional checks and balances of truth and impartiality no longer apply.
This is already profoundly affecting society and shaking established democracies to their very foundations.
As the educated elite, here on LinkedIn we smugly think that fake news does not affect us. It is just dumb people that can’t figure out the difference between fact and fiction that fall for this rubbish. We could not be more wrong.
As humans, we have a cognitive bias to believe what we hear, especially if it is reinforced multiple times. As we are bombarded with information every minute of every day, from an evolutionary perspective it is not efficient to challenge everything we hear or see.
Instead, our brain’s default is to believe stuff. It is only later, when we have time, cause and mental bandwidth that we go back and re-evaluate.
So, what does this mean for us as financial modellers?
In business, fake news is not a new phenomenon.
Throughout my career I have come across bad business decision making based on fake news.
Based on ‘made up’ numbers repeated multiple times that grow a life of their own.
Based on misleading information presented by those with vested interests.
Based on ‘market intelligence’ or what a few guys down the pub reckon.
As financial modellers, we are the guardians against fake news. We are there to help business leaders to filter out fake news. To provide an objective check of the facts.
We must challenge the assumptions of others and our own biases to give as objective a view as possible. We must also have the courage to call out fake news when we see it.
Financial modellers, fight fake news, save the world….