The truth? You can’t handle the truth!

- Caglan Bagci | NZIJ MORTGAGES


An example I have used before is media attention on home invasions.  You will read about it in the newspaper on every occasion that someone experiences a home invasion.  Media attention may lead you to conclude that this is a common event.  However the lack of home invasions is never reported.  So whenever someone experiences a home invasion in New Zealand, 4.1 million people don’t experience a home invasion. From a statistical viewpoint you would say that home invasions don’t happen! Is reporting such an event responsible, helpful or useful to anyone in any way?

Another recent example is swine flu.  Yes, there have been deaths. However, every year you will read about a flu epidemic.  The truth is that any flu strain can mutate and cause millions of deaths at any time. Is bringing it to anyone’s attention helpful to anyone? (Other than those who have stocks in Tamiflu) or even newsworthy?  Doing so will however make us all a little more fearful.  That fear will keep us reading the latest developments which will in turn keep advertising space at a premium.

An unfortunate truth about human nature is that we will only take action for two reasons, fear and greed.  We will act to avoid something we fear and we will also act to gain something we desire. Fear however, is significantly more motivating than greed.  That is why the media presents so much negative information. It sells space better than happy news. Our ghoulish nature is more fascinated by the things we fear than the things we desire. This is also why good real estate sales people will tell you ‘you will have to be quick there is a lot of interest in this one.’  Fear that you might miss out on a deal will make you more likely to make an offer.

So how do you process information in a way that will allow you to make sound judgements and quality decisions? 

Well, when anyone makes any kind of statement or argument ask yourself ‘if that is true, who will benefit?’  This question will help you to uncover any hidden agendas or manipulations. Those of you who have a substance problem or who watch the ‘x files’ will find this way of thinking second nature.  It may take some work for the rest of you.

What else can you do?  Be selective with what you read. Avoid the first 5 pages of every newspaper for the rest of your life.  Don’t watch TV news.  If you want to know something first ask yourself what do I want to know? Try to get as many opposing views as possible on a subject to help you make sound decisions. 

So is there a recession? Well all that existed still exists and all that didn’t still doesn’t. The only thing that has changed is how we feel about it.  As we are not as happy or optimistic as we were, our sentiment is represented in prices or values.  Why aren’t we happy and optimistic?  Because we read papers and watch the news. What do you think would have happened to asset prices if all media attention was positive?
So who could possibly benefit from a recession? The answer is anyone in acquisition mode.  This is the perfect time to buy everything. The very wealthy have opportunities in times of recession as they can be in acquisition mode. Is it a coincidence that the very wealthy ‘own’ the media? 

Incidentally, my hidden agenda is that you all cheer up.  It is in my interests that you start to behave as if there is no recession and all buy property and borrow money as that is good for my business.  And that’s the Truth!
I am happy to respond to any questions on this article or anything in previous issues.  Send your questions to mortgages@nzij.co.nz