How Can Reading News Teach Us To Be A Better Investor?

I am a subscriber to The Wall Street Journal, so the U.S.-based business-news outfit is a big source of information for me about the latest happenings in the global financial markets. At the same time, I am also an active listener of reports from Mandarin-speaking news sites and channels.

Over the years I realized that with regard to economics- and business-related news, it seems that we really have to take things with a pinch of salt when listening to the West wax lyrical about the East and vice versa.

For instance, The Wall Street Journal has been pessimistic about the economic growth of China and this can be seen in headlines like the following: “Loan ‘Guarantee Chains’ In China Prove Flimsy” or “The End of China’s Economic Miracle?“. Meanwhile, the Chinese media would naturally be more optimistic and typical headlines that embody the mentality include “Conditions exist for sustaining China’s growth: expert and “Foreign-funded companies continue to expand China presence”.

This begets the question: Who is right?

In some ways, the Western and Chinese media are both right and wrong. For Western business news outfits like The Wall Street Journal, it might be natural for them to focus on the weak points about China’s economy as the threat of the Asian giant replacing the USA as the global superpower is real and can be quite intimidating. So, focusing on the weakest links within China might be a more comforting picture for its readers.

On the other hand, the Chinese would naturally want their country to be in the ascendency, even if for nothing but nationalistic pride. So, stories about the strength of China in Chinese media has strong appeal for its targeted Mandarin-speaking audience.

Being in Singapore, this is where we have an advantage. Our culture is a hybrid of both Western and Eastern influences, and this allows us to easily see the point of view from both sides; we are thus better equipped to understand and spot the biases in the media of the two worlds.

The ability to see both sides of the coin is one of the most important aspects of being a successful investor. This applies to understanding the economy of a giant nation like China as well as understanding the business prospects of companies. Only by listening to different people and different viewpoints can we establish a more complete picture of the whole situation.

So the next time you read a news article, think about what the other side might be saying.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim does not own any companies mentioned above