November 2022 Commentary

There is an old journalism colloquialism, “If it bleeds, it
leads.” Never has it been more true in our society than
today. As we gradually move away from COVID, the
ascendancy of negativity in media headlines has never
been greater.

In a recent research paper published by Rozado, Hughes
and Halberstadt, analysis of 23 million headlines published
between 2000 and 2019 by 47 popular American news
outlets found that those headlines grew significantly more
negative over time. Headlines in left-leaning media got a
lot more negative, while headlines in right-leaning
publications got even more negative.

Similarly, another research piece published in 2018 by
Interiano, Kazemi, Wang, Yang, Yu, and Komarova analyzed
more than half a million popular songs between 1985 and
2015, determining there is a clear downtrend in happiness
and corresponding surge in sadness and negativity.
Interestingly, the same research indicated “successful”
song patterns over the same period focused on happiness,
with brighter timbre, were more party-like and more
danceable.

Naturalist David Attenborough once said: “If you collect
100 black ants and 100 red ants and put them in a glass jar
nothing will happen. But if you shake the jar violently and
leave it on the table, the ants will start killing each other.
Now, the red ants believe black ants are the enemy while
black believes that red is the enemy, when the real enemy
is who shook the jar.”

The world is becoming increasingly polarized. Middle
ground is giving way to extremism on both the left and the
right…populism is rampant the world over. The swing from
liberalism to populism is not new and will undoubtedly
continue over time. Unfortunately, this leads to more
bellicose outcomes of human interaction which tends to
make our world as less pleasant place. But fortunately, like
many such movements, this course will undoubtedly
reverse over time.

By almost any measure, our life today is pretty great –
certainly much better than it used to be. Measures that
would include life-expectancy, financial well-being, general
health, the relative threats of crime and war, safety, and
much more would all indicate our lives are much better
now than they have been over history. Yet it’s clear that
more people are bothered, or conditioned to be bothered,
than they should be.

Those who highly value work and responsibility, emphasize
what they can control rather than what they cannot, are
compassionate, and resist the temptation to feel envy and
resentment of others, are most likely to find their lives
meaningful. However, even they have struggled with the
continued anxiety around another potential COVID
shutdown, rising interest rates, and falling markets causing
pressures on their retirement planning.

Many of the discussions on the market today begin with
one of two diatribes – that sentiment is too negative, and
a reversal is forthcoming, or that the past eleven months
have been difficult, but the worst is yet to come. Whether
you believe the positive or negative view, the common
theme is their recency bias. As we’ve written many times,
one cannot accurately predict market movements over
short periods; what one can realistically predict is that, in
the long term, investing in businesses with growing cash
flow run by capable management teams will generate
wealth.

The things that matter in terms of happiness are those
you’d expect: a good marriage, a loving family, personal
autonomy, and being charitable. The happiest people are
fulfilled by their work, have little financial stress, live in
great communities, have good physical health, and have
loved ones they can turn to for help. Revel in what we so
often overlook.

This is our final monthly Commentary in what has been a
difficult year. We wanted to end on a positive note. Life,
like investing, is a marathon, not a sprint – so don’t get
caught up in recency bias. Don’t worry, be happy. And from
all of us to you, our very best wishes for the coming New
Year.