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Chapter 1: What is the main topic discussed in this episode?
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Please remember that all of the information in this podcast episode is limited to general information only. That means the information is not specific to you, your needs, goals, or objectives. So you should seek the advice of a licensed and trusted financial professional before acting on the information.
And before you acquire or apply for a financial product, please read the PDS or product disclosure statement, which should be available on the issuer's website. Lastly, please keep in mind that past performance is not indicative of future performance.
In this episode of the Australian Finance Podcast, Kate and I reflect back on our first episode on financial news and provide an update and ways to think about consuming financial news in a healthy way throughout coronavirus isolation and how it can possibly impact your finances and decision making. We hope you enjoy this episode of the Australian Finance Podcast.
Kate, welcome to this episode of the Australian Finance Podcast.
Thanks, Owen. It's good to record another episode on this sunny Tuesday morning, I think it is today.
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Chapter 2: How has COVID-19 changed the way we consume financial news?
Like, seriously? Yeah. An 18% increase.
Reading celebrity news is actually in front of listening to podcasts in percentage increase. So we'll include the link to this venture capitalist chart in the show notes because it's quite funny to have a look at and see what everyone's getting up to and whether they're reading healthy eating articles or actually cooking.
Very interesting. What about when it comes to trustworthy sources of information?
Yeah, I think at the moment, I mean, personally, I've been looking at the sort of ABC News online a lot, but I've also been checking other sources, but it's sort of changing very regularly. So two news stories could be published at the same time, but have
slightly different information just because of the constant inflow and that's why it's also important I've found at the moment to look at what time the article was published and when it was last updated because if things are changing day by day so things you see in the morning might not be the same as the afternoon especially when the government was announcing all those subsidies like JobKeeper and JobSeeker the other week and things kept changing and then suddenly there was the childcare subsidy and so it's important to have a look
when it was published, who it was published by, what news station you're looking at, especially if you're just looking at the news on Facebook or other sources like that where you don't quite see who the story or news is from. So just check who's publishing the story, where are they getting their statistics from as well.
Yeah, it's an interesting one because when there was a survey, and we'll put a link to it in the show notes again, when there was a survey done, only 61% of people say that they trust the World Health Organization for sources of information this time. So... You know, when you talk about the pinnacle of information for epidemics, it's probably the World Health Organization.
And less than... So if we go one step down, only 49% of people trust the government websites for accurate information. So, I mean, this is like... For me personally, this is kind of like up there as the most important. And then... I mean, it's not surprising in my opinion that we see 39% of people trusting the news channels.
But what's even scarier than that is only 31% of people trust scientific articles. So, I mean, maybe that's a comprehension thing. Maybe it's an access thing. Who knows? But I mean, if 31% of people are trusting scientific articles for trustworthy sources of information, it's pretty scary.
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Chapter 3: What are the dangers of misinformation in financial news?
So I do not say that, you know, that's not hyperbole. It's actually the truth. It's probably the most profound book I've ever read. And... In effect, he spent his life as a doctor studying epidemics and working in third world countries trying to help them cure illnesses and get fresh water and all of these different types of things. And he wrote this brilliant book called Factfulness.
I'm going to probably ruin it for a lot of people, but there are effectively eight factfulness rules of thumb. And the eight rules of thumb are effectively instincts that our brains get tricked into. And one of them is the gap instinct. So... Um, people try and like draw two parallels between different things and say, there's a gap, you know, it's us versus them.
It is, you know, we put a label on things. It's first world versus third world. Um, the second thing is obviously the negativity instinct or the fear instinct. Like we talk about this a lot, like fear mongering in the news, you can see that everywhere. So you just got to expect it's going to happen. You're going to expect the news.
The next thing is that people think things move in straight lines when they don't. So we've found that out with, um, epidemics recently with coronavirus, COVID-19, people thought, oh, you know, and even I thought this for a while, is that, well, if 3,500 people die a day from car crashes, why are we worried about potentially China losing 3,000 people from a flu-like symptom, right?
That's a straight line insect. We forgot that these things do not move in a straight line. They actually are exponential. Obviously, we've got just a general negativity instinct as well. But the big one that we see at the moment is this thing called a size instinct.
And what we tend to see in the news is things like, I think you've talked about this before we started recording, Kate, about the stock market news that said the stock market fell sharply 1% today.
Yeah.
you know, like 1% is nothing. It does not mean anything to anyone, like 1%. And yet they say that that's a sharp move or like when it falls three or 4%, they throw out numbers like $50 billion wiped off the share market. And then there's a big red flash across your screen. But $50 billion in the scheme of 2 trillion really isn't a big deal.
So they try and throw these numbers at people who are uninformed to scare them. And I'll just throw one more is that it's, which is one you all know well, and it's one that any marketer uses is the urgency instinct.
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