Don’t get Overwhelmed by Information

Up until 2013, the two leading causes of small airplane accidents were LOC (Loss of Control) and CFIT (Controlled Flight Into Terrain). CFIT is when a pilot is flying along normally and suddenly he finds the earth at his same altitude. These “under control” accidents happen largely in poor weather or when there is diminished visibility.
I was thinking about CFIT a few weeks back as I approached my home airport on a night flight from Phoenix. I had just crossed the Grand Canyon and was passing the hills and peaks that were below me but that I could not see because of the darkness.
The night posed no unusual risk to this flight because in my cockpit are four fully independent Garmin GPS screens that clearly identified the terrain as if it had been noonday. As I descended into the darkness I thought of past pilots who had lost their lives in CFIT accidents, and how those accidents could have been easily avoided with the technology in my plane. In a recent article in Flying magazine it said that this killer of the past has largely been eliminated from accident reports in just the past few years.
This new technology has been such a blessing to pilots – well – except for one thing. With the advanced technology in the new airplane cockpit, pilots can become so overwhelmed by all the information that they forget to look out the window and fly the plane. This has led to a new class of LOC accidents. Think of a distracted driver texting on a cell phone. And so in some ways the cure has become the cause of the next problem.
If you would have asked me 20 years ago what was the number one cause of bad investment decisions, my anecdotal response would have been, “Lack of information.” Investors got their information from monthly magazines, newspapers and investment newsletters, and it was often too old to act upon it by the time it arrived. Corporate news back then was often filtered and sanitized, making it difficult to find the truth.
If you ask me today what I think the number one cause of bad investment decisions are, I would probably respond, “Too much information.” The age of Twitter® has made it more difficult for corporate execs to hide their misdeeds behind carefully worded press releases. Unfiltered and raw corporate and economic information is available on a cell phone, in real time. Where once investors may not have known what they should be worried about, today they make mistakes because they worry about too much. And so, as in flying, the cure has become the cause of the next problem.
Much of pilot training today focuses on using the benefits of technology without becoming distracted by it. Modern investors need to likewise discipline themselves to take advantage of technology and its unlimited information, without becoming overwhelmed by it.