Investing in Frontier Markets: Opportunity, Risk and Role in an Investment Portfolio

CHAPTER 4

Solid Investment Information vs. Media Images

Effective decision making in any crucial undertaking, including investing, requires a hard look at the right way and wrong way to make decisions and the right way and wrong way to gather information to underpin those decisions. Understanding the distinction between relevant information and irrelevant noise can make a huge difference in the decision-making process.

When investors look at frontier markets, their opinions are most likely heavily influenced by the news coverage they see or read. The 24-hour news cycle, countless Internet news portals, satellite radio, mobile news screens, conventional radio, television channels, newspapers and magazines combine to keep us instantly and perhaps unrelentingly informed of developments in every news event. The “all news, all the time” format satisfies news junkies, shift workers who may not be able to watch conventionally scheduled newscasts and others who want constant updating on the minutiae of a news story as well as the core details.

The phenomenon started with the launch of CNN in 1980 and accelerated following the launch of CNN2 in 1982, later renamed CNN Headline News and then renamed again to HLN. The success of those networks led to other 24-hour operations in television and radio in the United States and Canada. It also led to the all-news format at the United Kingdom's British Broadcasting Corporation and Sky News as well as operations such as Euronews in Europe and Al ...