Two recent articles caused me to think about how social media has affected communication. More importantly, I've thought about how I can best use social media along with other modes of communication to grow personally and professionally.
The first article, from The Washington Post, described how business reporting has evolved from a friendly exchange of information to a world of "No Comment."
The second was from Institutional Investor magazine and profiled hedge funds who were livid when the contents of their client letter were leaked to the masses.
The common thread with both of these examples is that they are one-way modes of communication. Corporate IR departments are hoping to get the company message out to prospective investors. Hedge fund letters are not meant to start a dialogue with investors, they are meant to get the manager's insights in front of people.
Social media, with its likes and comment capabilities, has the potential to facilitate two-way communication. An "expert" can weigh in on something, then fuel a discussion with people from different backgrounds and life experiences.
But what actually happens when you use social media?
The more you "like" and "follow" others, you are creating an echo chamber of people that tend to think in a very similar way to you. So comments become less of an "interesting point, but have you thought of this?" and more of a "yes exactly what she said!"
Social media has also leveled the playing field. You don't have to be an expert to get your ideas out there, you just need to have an internet connection. While this raised the amount of discourse, unfortunately it's lowered the quality of dialogue.
In the financial industry, this means self regulatory organizations such as the CFA Institute and the CMT Association have an even greater role to play in ensuring subject matter expertise and ethical standards.
I would also say that as blogs and social media have made it much easier to get a message out to the masses, it is no substitute for interactive communication in the form of webinars, in-person events, and one-on-one meetings.
All of these methods are forms of two-way communication, where there is an actual give and take between the speaker and the participants. (Notice that I used the word "participants" and not "attendees" as one suggests an active participation in the event while the other suggests you simply managed to make it to the right building at the right time!)
Why is two-way communication important?
Stephen Covey's fifth habit tells us to "seek first to understand, then to be understood." That is, practice active listening by focusing what someone is saying to you. Truly listen and internalize what they're saying, instead of using that time to formulate your own response. Then you're really having a conversation, instead of just having two speeches that happen to occur at the same time.
After a professional career without social media, I have found that writing a blog and being active on Twitter and LinkedIn has helped me grow as an investor by forcing me to articulate and defend a point of view. It has also allowed me to focus on things that I am passionate about, from the markets to mindfulness to music.
At the same time, I have a newfound respect for conferences, interactive webinars, and one-on-one meetings, as they provide the opportunity to use your expertise as the beginning of a two-way conversation, as opposed to a one-way presentation.
For those of you in the New York area, I'll be speaking on Wednesday evening 7/11 at the CMT Association New York Chapter meeting. I hope to see you there for an interactive discussion on viewing the markets from multiple time frames!
RR#6,
Dave
Disclaimer: This blog is for educational purposes only, and should not be construed as financial advice. Please see the Disclaimer page for full details.