Casinos & Media – Distorting Your Reality For Their Gain

Reality. In many cases there is an absolute reality or truth, but how we act is based on our version of reality, and in that case reality can be relative. It’s based on our perceptions, and our perceptions can be distorted. A colorblind person may see gray, instead of green. The absolute reality in that case may be green, but the reality to the colorblind individual is gray.
And biases influence our perception, so someone with a strong bias may not see the absolute reality, rather they see the reality they want to be true – and act accordingly. Some businesses go out of their way to distort our reality to get us to think and act a certain way. Sounds bad, but it happens all the time. Casinos and the financial media are excellent examples of that.

It’s All Winners at a Casino

I am not a gambler, but I have walked through many casinos to go to a show or restaurant. Think about the last time you walked through a casino; imagine yourself there right now. What do you hear? Certainly you hear the dings of electronic games signaling a winner. Maybe you hear the shouts at a craps table from someone who just rolled a desirable number. And what you see is a lot of movement and action. What does that tell your subconscious? That there is a lot of money to be won, and you need to get on the action. It distorts your reality by signaling only when desirable (winning) outcomes occur. You are believing, consciously or not, that you are going to be a winner.

What would happen if casinos weren’t trying to distort your reality? What if they wanted to provide full information to help you make an informed decision? They would need to make a negative sound for every loser, maybe an annoying buzzer. If that were the case, you would walk in the casinos and the few dings would be drowned out by the constant buzzers. That would tell your mind you are about to lose your shirt, you better hold fast to your wallet and get out of there now. But they aren’t interested in helping you make an informed decision. They are interested in distorting your reality so they can make a profit.

The Danger of The Financial Media

Information is generally a good thing when it comes to making a decision. But that isn’t always the case. If the information is biased, it may influence you to make a bad decision – and in that case you would be better off without the information. That is the key question to ask of any information – the bias and conflict from the party providing the information.

Bias and conflicts of interest exist everywhere. But it is the extent and potential damage of the bias/conflict, we need to assess before we decide whether to use the information. The financial media reports, so they say, to help investors make informed decisions. That may sound nice, but I don’t believe it. I have a lot of empirical evidence to support my skepticism. The financial media exists, like most business entities, to make money. In order to do that, they need you to tune in…today, tomorrow and the next.

The financial media employs many psychological tactics to get you to tune in. They sensationalize the news and use voice inflections, certain colors and scrolling/flipping data to get you emotional. They interview experts (who are only right about half the time) to confidently reason what just happened and predict what will happen next (illusion of certainty). Sure it’s informing you, but not to help you make a good decision – it’s to get you to think short term so you will tune in and come back for more.

Control Your Reality

I find it unfortunate that many investors will give more thought to something the financial media says than to their own financial plan and/or financial planner. But that is the power of bias. We can get a greater control of our reality by understanding that not all information is beneficial. Much of the “information” we receive in life is to get us to act a certain way by distorting our reality. That is just life. We can improve our reality and decisions by avoiding information from heavily biased sources. For investors, the financial media is a great place to start.