Basic Strategy For Hyping An Investment Trend

1. Take a small data sample of something that confirms the view you’re determined to promote;
2. Regardless of how rigorous the methodology or how representative the sample size, declare that this is indicative of a broader trend–forest for the trees or some such thing;
3. Willfully ignore any aspects of this declaration that remotely contradict your view;
4. Deny/insult/discredit/lash out at anyone who tries to take an even-handed view on it;
5. Begrudgingly concede that nothing is perfect but that a positive attitude is what counts;
6. Neglect to make clear the very pertinent fact that you have a vested interest–financially, politically, reputationally–in a positive outcome which therefore inhibits your own objectivity;
7. If your lawyers insist, loosely outline the caveats to your opinion and bury them somewhere where they are least likely to be noticed (“past performance is not indicative of future results” is the boilerplate here);
8. Debunk the caveats by paraphrasing points 1 and 2 and emphasize the probability your forecast will prevail;
9. Lather;
10. Rinse;
11. Repeat.

Now, let’s consider a brief list of where we’ve seen this template applied in the recent past:

BRICs
Microfinance
Mexico since the 2012 election
Brazil
China
Africa
Subprime
Dotcom

If we adhere to the basic journalistic rule that three examples makes a trend, I think this clearly qualifies.

Anyone denying this template obviously must be guilty of perpetuating it.

Granted, nothing is set in stone and how media dynamics interact with investor psychology is fluid by nature and therefore subject to evolving.

But people ultimately like happy endings. It’s an innate human desire.