On Wall Street, information is power. Investors increase their potential to profit by knowing more than the person on the other side of each transaction. But some unscrupulous folks don't stop at simply gathering better intelligence. They aim to cash in by spreading lies that mislead and misdirect ordinary investors like you -- making themselves rich at your expense. With persistence and a little know-how, you can protect yourself, your friends and family, and your money from making these kinds of costly mistakes.
"IF YOUR MOTHER SAYS SHE LOVES YOU, CHECK IT OUT."
-- From a sign on the wall at the City News Bureau of Chicago, as quoted by Newton Minow in the Chicago Tribune.
The first and best way to fight misinformation: Stop implicitly trusting anything and everything you read -- especially if you only read it once, from one source. If you find something new, unexpected, or surprising online, ask yourself the following questions.
1. Where did this information come from?
Here's a quick checklist to run down. None of these alone guarantee that what you're reading is accurate, but their absence should make you especially wary:
- Can you tell where the information came from? Can you follow it back to its original source?
- Does it come from a source you recognize and trust?
- Does that source have a place where you can see the names of the people behind it, and get in touch with them?
- Is it labeled as impartial news, or as a statement of opinion?
- Does the source have a long, established track record of accuracy? Does it promptly print corrections when it makes an error?
2. Where did they get the information from?
Did the place where you got this information speak to an actual person, or are they reporting a rumor from a message board? Direct sources are better than second- or third-hand ones. Sources willing to give their names and go on the record are better than anonymous ones. Multiple sources are better than single ones.
Pay attention when newspapers, magazines, or web sites tell you where they got their information from -- i.e.,This story was sourced from interviews with more than two dozen officials, executives, and people directly involved vs. two people familiar with the matter said [X]. These disclosures provide clues and cues to tell you how much weight you should give to each piece of information.
Most reputable reporters won't present anything as an indisputable fact unless they can get at least two different people to back it up independently. If the information they're reporting comes from only one person, or if they heard different stories from different people they talked to, they'll tell you. If you don't see this kind of information in what you're reading, proceed with caution.
3. Can I find this information anywhere else?
Are other reputable sources reporting this information? Where did they get their facts? Are they citing the same source or sources as the original place you found the information, or have they verified it on their own? The more places that verify information, and the more different sources that confirm it, the more reliable it tends to be.
4. How could I find out for myself whether this is true?
If someone's quoted in a story, can you look them up online to make sure they exist? What impartial evidence would prove that the thing you just read is true or false? Are there experiments people could run, or data they could gather, that would bear it out? Where could you go to find that information yourself?
5. How far removed is this information from primary sources?
Are you looking directly at a company's balance sheet to see the actual numbers, or just reading someone else's interpretation of those numbers? Are you reading a direct quote from someone who observed the facts firsthand, or a rumor or paraphrase of that information from someone else? The farther you get from a primary source, the less you should implicitly trust what you read.
6. Does this really show what I think it shows?
Plenty of photos and videos get spread online with false descriptions and context. They may have taken place years ago, in entirely different parts of the world, involving wholly different groups of people than the way they're described. Before you reach any snap judgment based on an image, examine it carefully for clues that can help you verify where and when it came from.
Try running a reverse image search on a copy of the picture to see if you can trace it to its original source. As for videos, do they have sound? Can you clearly hear the language being spoken, read street signs or shop signs, or identify uniforms? The less information an image or video contains, the easier it is to take out of context.
Charts and graphs can have the same judgment-sapping effect; studies show that we're more likely to trust information in charts than in tables. Unfortunately, even the sharpest experts can sometimes misread what a chart's actually saying, especially if they're eager to back up a point of view they already hold. When you see charts or graphs online, look carefully at their fine print and tiny labels. Trace them back to their original source. (If you can't do that, don't trust 'em.) And draw your own conclusions from a careful look at the data, rather than letting someone else's summary do that work for you.