Hurricane Katrina and the Dot Com Bubble
There has never been more information. And that’s exactly the problem. Too much information too quickly published is just as bad as too little.
Hurricane Katrina exposed a serious and ongoing problem with misinformation. It was widely reported that more than 10,000 were dead, when the actual figure was a little over 1,000. A rampage of murder and rape was reported. Not true. It was estimated that it would take three months to drain the city. Within six weeks, it was largely dry.
The Dot Com Bubble happened during a period when investors never had as much access to information. Lots of information did not encourage rational decision-making but rather fuelled irrational exuberance.
Human beings are much better at dealing with scarcity than with glut. This is particularly true when it comes to information. It has long been accepted wisdom that you can’t have too much information. You can.
Too much information makes for bad investment decisions, according to a 1980s study by MIT. Some students were divided into two groups. Each group was given a portfolio of stocks to manage. One group could only see the changes in prices of their stocks. The second group had access to the prices as well as a constant stream of financial news particular to these stocks. Which group did better?
“Surprisingly, the less well-informed group did far better than the group that was given all the news,” James Surowiecki writes in his excellent book, The Wisdom of Crowds. Surowiecki goes on to give another example of a group of students that were asked to guess the number of jelly beans in a jar. The initial average guess of the students was within 3 percent of the actual number.
Then the students were asked to guess again. This time they were told to take into account that there was air space at the top of the jar, and that the jar was made of plastic, meaning that it could hold more beans than might be expected. With this new information, the students’ average guess was off by 15 percent.
It is absolutely wonderful that people today have access to information in a way they never did in the past. We just need to become better at managing it. How do we do this? One way is to better develop our ability to think in the long term. That means resisting reacting to a lot of the news we are exposed to on a day-to-day basis.
News by its very nature is immediate and exaggerated. The explosion in news tools-from blogs to video cameras-creates an even greater focus on the now. The vast quantities of information we are exposed to every day compels us to gather smaller and smaller snippets of information that relate to our immediate needs. It’s very easy to miss the big picture.
It is so hard today to think long term, yet it has never been more important. Your future career hinges on your ability to plan ahead. Resist becoming a news junkie. Resist churning out emails and web pages. Sit back and think hard.
In an age of information overload, what you don’t read-what you don’t write-is just as important as what you do.
For your web content management solution, contact Gerry McGovern http://www.gerrymcgovern.com
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