How you spend your time (and attention) as a trader is a key driver in your eventual performance.  We all have a limited amount of time we can devote to the markets, therefore maximizing the impact of that time is crucial.  This point was driven home in reading Margaret Heffernan’s interesting newish book Willful Blindness: Why We Ignore the Obvious at Our Peril in which she writes:

After a decade of experiments by himself and others [Dr. Daniel] Simons,  concludes that we see what we expect to see and are blind to the unexpected.  And there are absolute hard limits to how much we can take in at any given time.

“For the human brain,” say Simons, “attention is a zero-sum game:  If we pay more attention to one place, object or event, we necessarily pay less attention to others.”

Our attention is a limited resource worth shepherding. The question is for traders whether their time is well-spent watching financial television?  The problem is that the way television is designed disrupts our ability to think.  Heffernan writes:

The bottleneck that characterizes our ability to receive information explains why we cannot intelligently absorb all the information presented to us on TV screens like those displayed by CNN, Fox and CNBC.  The scrolling text, sidebars and stock prices don’t make us smarter or better informed; they make us stupid.  While we are watching such a busy array, we can’t efficiently think, discriminate or make critical judgments.

Trading is hard enough under the best of circumstances.  If you continuously expose yourself to inputs that don’t make you “smarter or better informed” you are doing yourself a disservice.

Items mentioned above:

The solution to market related noise.  (Abnormal Returns)

Margaret Heffernan’s Willful Blindness: Why We Ignore the Obvious at Our Peril*

*Amazon affiiliate. You know the drill.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.