Yesterday's News

I have never been more optimistic about the future. The internet has been on a rollercoaster ride and so far it has survived. It got stretched philosophically only to adapt and expand. The biggest test came late in the last few years as Twitter quite frankly started to annoy a lot of people. Politicians wanted to regulate it. Journalists wanted to burn it down. And users were just mad at each other.

Let's make a deal

Mass media had a rough decade. The advent of Twitter disintermediated the industry and allowed influencers to connect directly with their followers. It directly led to a new president and indirectly made the world's richest person. It brought together working professionals like "Science Twitter" and "FinTwit". Celebrities no longer needed their publicists to tell their story, and politicians spoke to constituents instead of their consultants. News stories broke on Twitter, while journalists tried to keep up with their feeds. Advertising plummeted, so much so that the Newspaper Association of America stopped updating the below chart.

Just as all appeared to be lost for traditional media, a lifeline was thrown. That lifeline came from a desperate government that lost control of its narratives, a desperate Twitter that needed to preserve its Section 230 status, and the rise of call-out culture. Traditional media became empowered again. It was able to wedge itself back into relevance by leaning on its experience as the "arbiter of truth."

And so the relationship began. Twitter would police its platform, and the media would continue to supply the news, just as they had for the last three hundred years. The content became centralized and the discourse not as rich. It was no longer a playground of 140 characters that connected people from around the world. It became just a never-ending newspaper.

What is news?

It would be foolish to discuss news without citing the wisdom of Walter Lippman. He once explained that "news and the truth are not the same thing." How so? "The function of news is to signalize an event, the function of truth is to bring to light the hidden facts, to set them in relation with each other, and make a picture of reality on which men can act."

There's probably no better case study on the relevance of news as the one we have in financial markets. In a textbook world where news and the truth are the same thing, markets would follow accounting. Profits mean fuel for the economy and returns for investors. But if investors believe in a different world from profits, accounting no longer really matters. What matters are beliefs. If a tree falls in a forest and no one is around to hear it, does it make a sound? The macro reasons for why no one was around was the topic of my first ever post. But the other big factor is of course the internet.

When I used to work at BlackRock I looked to research reports and headlines for investment ideas. Occasionally some topics would be too hot not to discuss, but by the time we had discussed them it also wouldn't be news nor was it very good investment advice. It was news when a topic was discussed in a thread or when an idea was spoken on a podcast. It wasn't news when it became a headline because the information had already been disseminated to the public. To borrow Lippman's words, "the hidden facts" were the "events," and the internet allowed people to generate their own news for the first time. Regurgitating ideas was no way to write nor to invest. Once I realized that I made sure I didn't make the same mistake again. I haven't picked up a newspaper since and I hardly ever listen to the news anymore. I dig up my own ideas in books and produce my own content. As are the many thousands of people that are now writing or podcasting for themselves.

No edit button

You see, Twitter made a huge mistake. Rather than embracing the future, it embraced yesterday's news. Rather than becoming a platform it became a publisher. It is now editing rather than moderating; acquiring rather than innovating; and regurgitating rather than producing. And it cemented it's legacy on January 8th, 2021. The terms of service had changed many times over the years, and now the users were poked in the eye. Freedom has a price, and the lack of freedom does too.

Just as traditional media had thought it figured out the digital domain (it took ten years), in came an army of bloggers, podcasters, and new applications. Just as public officials figured out how to handle text, characters turned into bits. As the the threat on the First Amendment grew larger, the voices not only grew louder, they became audible.

My Hunch

I am still begrudgingly on Twitter for the sole reason of staying connected with certain individuals. But in the same way I "canceled" newspapers and TV news, I unfollowed most major institutions last month. The content was uninteresting and the never ending stream of information was not sustainable for my sanity. In came Clubhouse and grabbed me out of digital depression. In only a month, I have learned more from the people on Clubhouse than I had from tweets (and I would generally say I learned a good amount from Twitter). My Clubhouse follower count jumped over my modest Twitter follower count. I have been on panels with people I never thought I would. It is the equivalent of running up on stage at a conference only for security to pull up a chair. Let's continue this there.