by Mike S. Shapiro, author of “Read the Tape: Using Situational Awareness to Predict Business and Personal Probabilities“
People sometimes refer to checking in on social media as “doom scrolling,” and if you spend much time there you’ll see why. Commenters are quick to bring to our attention the specter of any woes – or potential woes – out there.
Viewing the 24-hour news channels isn’t much more uplifting, as pundits weigh in with mostly negative predictions about what lies in store for us.
And certainly, over the last few years, a number of things have raised legitimate concerns – the pandemic, inflation, geopolitical unrest. The world, as always, gives pessimists plenty of ammunition.
But sometimes, it seems, that the seemingly non-stop chatter about the problems is more problematic than the problems themselves.
Take inflation. This topic draws gloomy predictions on top of gloomy predictions about a potential global recession, job loss, and the decimation of our already shaky economy. If you believe many of the news commentators – and social media commenters – our lives are poised to go off the rails at any moment.
Sure, we are indeed a bit pinched at the gas pump and groceries have gotten notably more expensive. But we’re also (collectively) still spending in sectors like travel, restaurants, and retail. That good economic news seems to get overshadowed.
Bad News or Great Things on the Horizon?
Now, no one would – or at least should – say that the problems we face are irrelevant. The pandemic caused real pain and heartache, as well as economic disruption. Inflation and rising interest rates are difficult to integrate into our short-term financial realities. And the geopolitical unrest and unpredictability are indeed alarming.
But I also know this: We are an enormously resilient species and, if you pay attention, as I do, to behaviors, actions, and conversations, it does not appear as though the sky is falling. Instead, for the most part, people are going out to eat, shopping, traveling, working, and generally getting on with life.
What do I conclude from this? While there are ongoing challenges, the inescapability of the news about those challenges is sometimes more difficult to deal with than the issues themselves.
I tend to be a contrarian, and when nearly everything I read and hear tells me that the sky’s about to fall, my contrarian nature thinks, instead, that great things are on the horizon.
And I do know this about business and investing: By the time everyone else is reporting about (and reacting to) something, the thing is already done.
Following the Crowd or Thinking Like a Contrarian
Did you just see something in the news about a hot stock? So did everyone else, which means you are likely to buy that stock at too high a price. Did you hear about a hot housing market? Guess what, you’ll pay more than you should for a house in that market because everyone else is moving there now, too. The same applies to “hidden-gem” travel destinations that aren’t so hidden once CNN or the New York Times reports on them.
That’s why, for example, over the past couple of years when everyone rejoiced about the seemingly endless upside to stocks and NFTs and art and home-sale prices, I had a bad feeling about things.
It’s my contrarian nature.
Here’s why I bring this up: If everyone says that we’re on the brink of a recession, they’re thinking that in a few months or so they’ll have data to back up what they’re predicting – data that’s based on what’s happening today, at this very minute.
But news that’s based on past data isn’t news, it’s just data.
Instead of jumping on the bad-news bandwagon, ask yourself about the direction things are headed, how long things have been going in that direction, and whether we’ve been down that road before. Chances are we have, so pay attention to learn how this time may be different.
Think for a moment of the housing market: Housing crashed in 2008. Did that mean it would never come back as a solid investment? Of course not – but headlines then and in the first few years to follow might have led you to believe that. Wise real estate investors paid attention. They leveraged the obvious – that housing would always be in demand – and when everyone else sold, they bought.
So, rather than listen to the babble, learn how to use the information at hand to better predict future probabilities for your business or your investments.
How do you leverage this information?
Begin by asking: What’s the same? People still need housing, for example, and that’s not likely to ever change. Figure out a few more points where you find consistencies. Then ask: What are the key differences (including behavioral patterns and common beliefs), will they last, and what are the impacts on the asset class (in our example, housing)?
When you can answer those questions, you’ll find opportunities – and you can apply this to any asset class that you want to explore.
So, if you turn on cable news or check your social media feed, and you discover that everyone claims the sky is falling, I encourage you to look up.
You will see that the sky is just fine. While everyone else surrenders to unreasoning fear and anxiety, stay calm and look for the smart opportunities that await those who can block out the negative noise.
Mike S. Shapiro, author of “Read the Tape: Using Situational Awareness to Predict Business and Personal Probabilities“, is an entrepreneur, investor, personal development coach, mentor, speaker, and Forbes podcast host. Shapiro is also a co-founder and CEO of EQTY | Forbes Global Properties and a co-founder of Plunk, a Seattle-based proptech startup.
