Every second of every day our senses receive a stream of raw data much greater than our brain can process. Yet, what we actually experience — what we see, hear, feel, smell, taste and comprehend — is a fraction of what comes in.
Tim Wu, author of “The Attention Merchants,” explains that our brain has a mechanism to filter out most of the informational onslaught, allowing us to focus on one thing to the exclusion of almost everything else. As a result, we can tune in or tune out at will — read a book at Starbucks, have a conversation in a crowded restaurant, study on the subway, or get lost in thought in a business meeting.
This process of automatically blocking unwanted or unneeded input is called paying attention. The good news is that it allows us to choose between alternatives. The bad news is that we must pay attention to something. If we don’t actively make a thoughtful and active choice, it’s likely our attention will be co-opted by outside interests.
Here’s some homework: Go through your day and note all the things that are vying for your attention. If you’re like most people, you carry a smartphone — a mechanism designed and perfected to draw and keep your attention.
Moreover, our daily world is awash with screens: screens at home, at work, at the supermarket checkout line, in the bank, at the gas pump, at the gym, in the airport, at the mall — all seeking to grab some part of your attention.
This is, of course, in addition to the attention you need for work, for family and for friends. By the end of the day, if you are not vigilant, the amount of attention available for your own personal concerns will be somewhere between little and nonexistent.
What Happened? The idea that our attention has monetary value is not new. One of the first people to capitalize on the value of our attention was Benjamin Day, founder and publisher of The New York Sun. Starting in 1833, Day priced his new daily at one cent vs. six cents for the competition. As a result, he lost money on every paper he sold. But the Sun had the kind of sensationalist news that drew and kept readers’ attention.
The circulation and advertising revenues quickly increased and within a year the Sun was the most popular and profitable newspaper in New York. Wu writes, “What Day understood — more firmly, more clearly than anyone before him — was that while his readers may have thought themselves his customers, they were in fact his product.”
In today’s uber-sophisticated 24/7 world of attention capture, the tale of The New York Sun feels quaint. A bunch of 19th Century New Yorkers took regular time out of their day to read some salacious stories, some percent of them saw the advertisements, a fraction of that group read the ads, of which perhaps a handful might have been influenced to make a purchase. What’s the harm in that? Probably not much, but only because the implication of this kind of attention capture was relatively benign.
No entity has understood the value of attention capture better, or used it more effectively, for more sinister purposes than the Nazis. Using the new technology of the day, radio, enhanced with techniques borrowed from advertising, the Nazis successfully captured and manipulated the attention of a nation. In Wu’s words, “Hitler was not just selling a choice, but a comprehensive vision of reality.”
What to Do Whoever has our attention can influence our thinking. And whoever influences our thinking will affect our choices. Therefore, if we really want to make free choices, we need to guard our attention much more carefully. That we do not, affects not just our choices, but our very ability to distinguish between what is real and what is not.
Philosopher and psychologist William James wrote, “My experience is what I agree to attend to. Only those items which I notice shape my mind.” In a world where commercial interests are in a Darwinian struggle to grab as much of our attention as possible, the bright, shiny objects they use to get us to notice them are at best, distractions, and at worst, manipulations that serve them by clouding our ability to think clearly.
For investors, these are not trivial matters. We all want to believe that we are making objective choices built on independent thinking, and that we are capable of identifying and counteracting forces that would get in the way of those goals. In practice, however, the obstacles in our path are many and not so obvious. But if we keep in mind something as basic as what we are paying attention to, the challenge goes from nearly impossible to difficult but doable.
I have read The Wall Street Journal every day for decades. It remains an excellent source of information. The reporters, columnists and other writers are outstanding journalists. But without guile or intent, even the Journal takes our attention into places that don’t serve us well. As I write this, two headlines catch my eye: “If Market Volatility Is Back, Are You Ready?” and “Bear Markets Can Fly In On Their Own.” The first article warns investors: “As stocks have rebounded from a scary early February slide, the up and down may be foreshadowing a new more volatile period for markets.” The second talks about how difficult it is to link bear markets with economic downturns: “Since, 1900, for example, there have been 36 bear markets … but only 22 recessions.”
Volatile markets can be scary, and the Journal has, to its credit, offered up well-thought pieces explaining both the history of and implications for the future of market behavior. There is no question that readers are interested in what the Journal has to say; otherwise these articles would disappear.
But if our concern and interest is too focused on short-term market behavior, there’s less attention for issues that have more to do with wealth accumulation and preservation. Since the bottom of the market in 2009, the S&P 500 is up over four times. What would cause smart and experienced investors to feel unease at a 10% correction after a rise like that?
The answer is self-evident. Their attention was co-opted by interesting, dramatic, but ultimately short-lived issues (unending media coverage of the correction and its potential implications), leaving little to no attention available for things that were less interesting, less dramatic, but far more permanent (long-term personal goals, sensible risk management).
The Long View The daily changes in the stock market may be the most reported news item outside of the weather. The implicit message, reinforced to us every day, is that what is happening in the market today is important and worth your attention.
“How is the market today?” is a question I am asked often. Knowing what the market did on any single day has yet to provide me with an edge, make better choices, or advanced my knowledge of investing one iota. Like it or not however, it grabs our attention — and while we may know intellectually it’s not important, it feels important. This is just one example of how co-opted attention distorts reality, making it difficult to think clearly.
Demands on our attention are only going to increase. As much as we feel perpetually assaulted and interrupted in today’s world, 10 years hence we may be nostalgic for what might feel like the good old days of 2018.
As a businessman and as an investor, I wouldn’t think of turning the clock back. The benefits I have gained from technology are worth far more to me than the costs. But I find myself regularly taking action to separate myself from what writer Cory Doctorow calls “an ecosystem of interruption technology” — to clear my mind, to think, and to consider what is really driving the choices I am making.
If you are a serious investor and you want to make choices that will serve your long-term interests, you need to keep your attention away from inputs that are focused on short-term interests. As more television, print and digital media are focused on short-term issues because they are more newsworthy, it is not a small challenge to limit the amount of attention you expose to them. But it is a challenge we all need to address.
The choice is simple: Who is going to be in charge of your precious, limited attention — you or Google?
Marshall Jaffe is head of Jaffe Asset Management LLC, based in Beverly Hills, California.
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