Excerpted with permission from the publisher The Health and Wealth Paradox: How to Use First Principles Thinking to Achieve Both, Ankush Datar and Mihir Patki, published by HarperBusiness/ Harper Collins India.
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Information Overload
Nifty falls record 1,000 points in worst showing.’ ‘Dow falls 2,000 points, its worst day since Black Friday.’ ‘We are in for a deep, long recession.’ ‘Man dies in gym due to whey protein.’ ‘Man dies of heart attack in gym, is working out a cardiac risk?’ You probably read these headlines and think doom and gloom are on the horizon, but the fact is that isolated events create a distorted view of the world and cause panic.
It is called the isolation fallacy.
‘Last year, 4.2 million babies died.’ This awful number, seen in isolation, creates anxiety—4.2 million babies dying is a catastrophe.
But when put in the right perspective, the number is less disheartening. In the 1950s, this number was 14.4 million; in the 1980s, around ten million. The 4.2 million figure is from 2016. Today, that figure stands at 2.3 million. Even a single baby dying is a heartrending tragedy, but improvements in healthcare and nutrition are reducing the number day by day. It gives us reason to hope for a day when the number will be zero, as it should be. But we may never get that perspective in a headline, because it won’t catch our attention.
In 2016, a total of forty million commercial passenger flights landed safely at their destinations.Ten landings ended in fatal accidents.
Of course, those are the ones that were covered on the front pages, because a safe landing is no news. Progress takes years, even decades, to acknowledge. A single event and one article on it can blow things out of proportion.
The point of this introduction is to tell you that headlines and news articles can paint a false picture for the reader. Headlines are negative by design, to incite a reaction from us. If it can’t do that, it hasn’t done its job. With people’s affinity towards shorter and shorter forms of content, it has become even easier to incite a negative reaction out of an individual.
\Writer David Perell has explained how easy accessibility to information is becoming a double-edged sword, with two types of biases:
Space Bias
A hundred years ago, our ideas and thoughts would have been shaped based on the place we were living in. Moving media was a difficult and expensive task, so information was restricted by geography and had to remain local. Today, things are radically different. We live in an age of abundance. One scroll on Twitter and we can know the latest information about events in New York, Paris, London, Cape Town or Buenos Aires.
This is usually information relating to the previous twenty- four hours. This puts us in a day-long closed loop. Social media highlights ideas that are currently fashionable, rather than great time-tested ones.
Time Bias
The space bias leads to what is known as a ‘time bias’ or ‘recency bias’. With old barriers broken and information more easily available, we are generally too focussed on the last few days or months and don’t pay any attention to the last ten or hundred years.
With attention spans falling, few people have the patience or capacity for concentration to read and understand information in a more focussed manner.Think of a 300-page book, as opposed to a 300-word news article. Every page in the book has been written with painstaking research and effort, with the expectation that it will be relevant over an extended period of time.
The news article breezily sets forth information that could be irrelevant in a few days. It is so much easier to read the news article. When it comes to information on investing and health, it is much easier for the reader to get influenced by a single article or hack provided by someone on social media. So, even though we are going through more information daily, it does not necessarily mean that we are more well- informed. Rolf Dobelli traces the history of the newsletter in his book
Stop Reading the News.
Commercial newsletters first appeared around the year 1450, following the invention of the printing press. These newsletters were distributed through subscription models and were specifically tailored to meet the interests of wealthy merchants and financiers. They covered a wide range of topics, including political events, agricultural developments, local and international news, and provided detailed information on the schedules of merchant ships, cargo movements and other specialized subjects.
The origin of newspapers can be traced back to 1605 with the introduction of the weekly publication Relation aller Furnemmen und gedenckwurdigen Historien in Strasbourg, Germany. The popularity of newspapers quickly spread from Germany to Amsterdam, then to London, and eventually across Europe.
The first daily newspaper, Einkommende Zeitungen, was established in Leipzig, Germany, in 1650. In the following decades, the number of daily newspapers increased significantly across Europe, and eventually worldwide. Publishers began prioritizing content that could capture readers’ attention and increase sales, regardless of its importance.
Back in the day, newspapers even highlighted on their front pages how smoking, or drinking cola, was a ‘good thing’. Ask yourself what would be the equivalent of these trends today.
This trend of excessive information has been accentuated in the modern day with the birth of content creators. Today, with the pace of artificial intelligence, new ‘content’ on health and investing is being dissipated on a daily basis. It is becoming an increasingly tougher skill for a beginner to understand what information is relevant.
Let’s face it, there are only a handful of things that really matter when it comes to health and wealth, but the world of social media makes us overthink and complicate matters more than they already are, by providing us information every single day that makes us believe we could add another process to enhance our journey towards a healthier and more stable financial life.
There are two types of individuals who typically post information:
Finfluencers, who provide financial information for educational purposes.
Fitfluencers, who provide health information for educational purposes.
There are genuine influencers in these two categories who are looking to help individuals in their health and wealth journey by providing solid advice. …
So where does the problem lie? It lies in those sets of influencers within these categories who tarnish this whole model of content creation by creating shortcut methods or sensationalist headlines to simply increase the number of followers or hack the algorithm to generate higher traction.
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We tend to follow the herd on most occasions, and social media algorithms are tailor-made to get us to do that, in order to increase engagement.
Daily access to this form of information leaves us with a sense of false dreams.
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So, we must be conscious of the content we consume. There are some really good creators out there who have added tremendous value on the health and wealth fronts, but for every good one, there will always be another who uses negativity or sensationalism to draw our attention.
We believe it’s the same with investing in boring mutual funds for the long term, or holding on to a stock for many years through lull periods. It requires one to reprogramme their brains towards the pain side of dopamine, but as we know now, that leads to long-term rewards.
A study conducted in 2012 showed how dopamine released in professional equity market traders dictated the returns they generated.
Those with a history of taking excessive risks and those who were too conservative had the worst results. Traders who were somewhere in the middle—the ones who were able to balance the risk efficiently—did the best. The study highlighted dopamine’s role in accurately assessing risk and reward in trading.
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Data does not lie; less than 1 per cent of traders in the markets are able to beat the returns of a bank fixed deposit.
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If we keep gobbling more and more of junk information, which is addictive just like junk food, once we try to go and detox, we’ll find it difficult due to our body’s new dopamine threshold.
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This is why it makes logical sense for someone who wants to bait or increase engagement on social media to share a polarizing view to trigger a response.
Negative information has twice the impact that positive information does.9 In psychology, this is called negativity bias; in some cases, it is also labelled the ‘loss aversion’ bias.
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Ankush Datar and Mihir Patki, The Health and Wealth Paradox: How to Use First Principles Thinking to Achieve Both, HarperBusiness/ Harper Collins India, 2024. Pb. Pp. 336
In The Health and Wealth Paradox, Ankush Datar and Mihir Patki present a set of principles. These principles of health and wealth are known already to everyone but the emphasis that the authors place on them being so intertwined with each other that one can learn from either discipline and apply those lessons to both. Principles such as less is more, your plan is your north star, delayed gratification, and to never judge a book by its cover. These also lend themselves to the chapter titles. Based on decades of their combined experiences in overcoming lifestyle diseases, creating sustainable patterns of healthy eating and workouts without compromising on occasional binges, and building a robust investment process for wealth creation, Datar and Patki bust popular myths, provide an actionable toolkit and endeavour to bring sanity back to the lives of many who have given up on the idea of having health and wealth together.
Ankush Datar is an investment professional, health and fitness enthusiast, and writer. He has been working in the professional investing field for the last eight years and is currently associated with PhillipCapital India in their portfolio-management services fund-management team, giving him a ringside view of the investing profession. He is a marathon runner and weightlifter, and has been doing both for the last fifteen years. He has also contributed articles to financial-services publications, appeared on podcasts and written blogs for health-tech startups and brands. He writes a personal blog on investing, health and psychology, and how these disciplines converge.
Mihir Patki is an investment professional with a deep passion for personal finance and nutrition. He started his career at Deloitte before transitioning to various capital markets roles with Bank of America Merrill Lynch and JM Financial. From 2013 to 2020, Mihir led CVK Advisors, a boutique advisory firm where he focused on special situations credit. In 2020, he co-founded Multipie, a social network for investors that grew into a vibrant community of over 1 lakh members from novices to seasoned experts. Multipie was acquired by ICICI Securities in 2022. Mihir currently works with Tata Capital's structured finance team. He is a chartered accountant and holds an MBA from the University of Oxford.
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