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The News Cycle: Reality Versus Viral News Media

29082018_Hero

The News Cycle: Reality Versus Viral News Media

In a world where news stories break within seconds of an event occurring, and media organisations are permanently engaged in a battle royal for people’s attention, it can be hard to separate fact from fiction. Hence we thought it might be interesting to take a look at some of the most viral news stories over the last ~20 years which combine people’s fear of widespread death transmitted through an uncontrolled medium (i.e. virus, flu, disease, physiological disorder, etc).

Looking at the period from 2000 – 2017 for events that fit this description and caused global media frenzies, the intensity of news mentions has varied with the Ebola outbreak (black graph below) in 2014 taking the top spot with its peak literally off the chart (truncated in order to highlight the other data sets), followed by Swine Flu (pink graph) in 2009. Naturally a global pandemic which has no known cure is going to the garner a great deal of attention until the fear dissipates (a spike). This is somewhat differentiated from a lingering concern such as an induced psychological disorder from violent video games (red). Violent video games has consistently been a background concern since 2000, in fact there was a mass shooting in Florida, USA in late August 2018 tied to this cause.

Multiple Axis Timeline of Viral News Media Mentions by Topic (2000 – 2017)

29082018_Image1Source: Information Is Beautiful

Taking the above data and mapping it onto a single axis, highlights the magnitude of the Ebola spike relative to the rest of the data (much, much higher). This result perhaps highlights the propensity of people to panic and the media to push the narrative in that direction to achieve a maximum audience.

Single Axis Timeline of Viral News Media Mentions by Topic (2000 – 2017)

29082018_Image2Source: Information Is Beautiful

Given we are looking at the most extreme, crisis producing events (i.e widespread deaths from an uncontrollable source), one may expect the news media to most actively cover those events that corresponded with the highest number of deaths. This however is not the case, as the media is more often focused on covering events that attract the largest audience and perhaps generate the most fear. This is evident from the following mapping which shows the number of deaths caused by each of our events. Staggeringly there is a sharp mismatch between deaths and what the media covers most extensively, with Bird Flu, SARS and Swine Flu causing many more deaths than their corresponding media coverage, whereas Ebola was the opposite.

Actual Deaths Attached to Viral News Media Topics (2000 – 2017)

29082018_Image3Source: Information Is Beautiful

The team at Montgomery Global is highly attuned to what is reported in the financial press and what goes into a high quality investment, with the pair often uncorrelated. Having an appreciation of how the media works, assists us in separating reality from hype and value from manias, as we pursue the most attractive destinations to deploy our investors capital.

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Amit joined MGIM in April 2018 as a Senior Research Analyst after spending seven years as a credit analyst at Credit Agricole and Citigroup, based in New York. Prior to this, Amit was an investment banker with Citigroup for five years in New York and Sydney, focusing on Media and Telecoms; Metals and Mining; and Consumer Products.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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