Photo by Wonderlane on Unsplash
The world is a confusing place ! Whichever aspect of the world you try to understand, it can be hard to really get to grips with what is going on. That applies to finance, world events, politics, economics, pretty much everything.
The Problem of Confirmation Bias
It is human nature to look for things which agree with, and reinforce, our view of the world and our beliefs. We all do it, consciously or unconsciously, and find it all too easy to reject information that doesn't fit with our world view.
But there are solutions.....
Use Multiple Sources
When I am trying to understand something which is in the news, I try to view at least three different sources. One from each viewpoint, and one which I hope is distanced enough from the issue to not have too much of a bias. Sadly, I am primarily limited to English, as my knowledge of other languages is poor.
So for example, with the current situation between Russia, the US and Ukraine, I have looked at both Fox News and CNN for radically different American viewpoints, France Today for an EU perspective, RT for the Russian view, and Al Jazeera and Wion as relative neutrals. For each source, I am aware they have their own editorial and political biases, so I try to work out what they are take them into account. But by getting that many different viewpoints I can see which facts they all agree on, which ones they differ on, and a spectrum of opinions.
Read Around the Subject
This is something I have always done as part of my daily life. Building up background information is always going to be an incomplete pursuit, and it can take a long time before you can really gather a serious amount of info.
A big part of it is getting the habit of curiosity. Dig deep into things that interest you, but also always be willing to explore things you know nothing about, approaching them with an open mind and allowing yourself to be delighted by what you find. Be willing to follow internet rabbit-holes !
So, taking the Russian example again, by instinct, I am something of an historian. Not the stuff they teach at school; I seek out the corners of history that are less commonly explored. Reading up on the history of Central Asia can illuminate Russian history and culture and their geopolitical concerns. Tied in with following the latest information (however imperfect) on military technology and procurement, and which units are getting the newest equipment throws a whole new perspective on the events around Ukraine.
Follow the Money
When it comes to both economics and current affairs, a key principle is to follow the money.
See if you can find out who is funding which side in elections. Work out who will get the financial benefit if politicians enact particular policies, and then see if those same politicians are getting funding or other payments from the same people who benefit.
A good example of that here in the UK is the Health Secretary. He has been a strong advocate of covid vaccine booster shots. He is paid around £150,000 a year to be Health Secretary. But he is required to register earnings from outside interests, and the top one on the list is £151,000 a year plus £48,000 a month in share options from a company providing AI data services to large pharmaceutical companies. What do you think will happen to the value of those shares if the pharma giants can sell tens of millions of boosters ? It doesn't matter whether you support vaccination or not, following the money shines a light on the decision-making process.
Assemble the Jigsaw
Once you've got lots of snippets of information, that's where the real brain power comes in.
Do you have enough viewpoints to eliminate bias ? Do you have at least a basic understanding of the cultural, financial and economic issues ? Do you understand the history of how we got to this situation ? Do you know the key personalities involved, and how their backgrounds might influence their approach ? Which facts does everyone agree on, and which facts are up for debate ?
The final thing to consider; where are the gaps in your knowledge ? None of us will ever know everything, but I believe that with enough pieces of the jigsaw you can put together a reasonable picture of what is really going on in the world.