Fake News

Pfäffikon SZ, Switzerland – Not only the financial industry faces major challenges, but also the written press sees that changes follow in quick succession over the last decades. However, a lot of news has become free, the question remains, however, how reliable it is. One annoying side effect is the publishing of fake news. Fake news seems harmless, but precisely in the financial industry it is not.

Influencing
During the US elections, it has again become clear how fake news is used to influence opinions. Fake news has many bases, the most obvious reason is of course money. By drawing attention it boosts the number of visitors, causing more ads can be sold. This form is relatively harmless.

Other forms are websites that deal with structural propaganda and far-reaching conspiracy theories. More and more communication experts are justifiably concerned about the advancing popularity of fake news. Spreading fake news could eventually have a corrosive effect on our democracy. The reader would be wise to consult professional sources, even though some have a colored nature.

Supervision
From my perspective, I look with a different pair of glasses to the distribution of fake news. Financial institutions are often attributed to power. However, they are well supervised. The media does not have such a model although the press forms a very powerful bloc in society. An interesting question is how the mainstream media can ensure their quality in an era of advancing fake news. The media is indeed not supervised. Hedge Fund Manager Ray Dalio of Bridgewater recently suggested that the mainstream media should be monitored better. The primary objective of journalistic integrity would have been replaced by sensationalism and commercialism, says Dalio.

Fake news can have a significant impact on financial markets, but also on society as a whole. The copying behavior of many mainstream media is annoying and in combination with fake news even dangerous. Social media is fast and fleeting and facilitates fake news. We are waiting for accidents caused by fake news, whether or not published by the mainstream media. Consequently, reliable and independent investigative journalism will be appreciated by the general public. Meanwhile, the reader would do wise to consider not any news as fact and to naïvely sharing it on his social media account.

It remains for me to wish you a good weekend.

Jan Dwarshuis is CIO at Thirteen Asset Management AG. Dwarshuis writes his columns in a personal capacity. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in above mentioned shares and has no intention of doing so in the next 72 hours.