Story-telling animals
Suppose you are invested in the stock of company A.
Picture this scenario: you own shares in company A. Suddenly, an analyst boosts the price target for company A. Later, however, it's revealed the analyst was actually talking about company B. Does this sway your perception of company A? Now, imagine a twist: the analyst mentions positive aspects of company A, highlighting their strong leadership team and long-term focus. Even after discovering this comment was about company B, your view of company A remains positively influenced.
The takeaway from a recent experiment is clear: humans are inherently storytellers. We struggle to retain numerical data and are more likely to ignore it if it conflicts with a compelling narrative. However, when presented with a story about a company, we find it challenging to dismiss, even when informed that the narrative is false.
This is the downside of misinformation, especially on social media. Such stories often seem credible, and even when presented with evidence disproving the story's validity, belief persists. Once a false narrative is seeded, it can be challenging to undo its impact on people. The damage is done the moment misinformation is introduced.
Written by urgent.news from Klement on Investing's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
