Thought I’d try my hand at some armchair philosophy today. I am an amateur at this, so be easy on me in the comments.
We are constantly being bombarded with information. Information that is useful is often referred to as Signal. Information that is not useful is considered Noise. This is the Signal to Noise ratio.
From the Wikipedia page Signal-to-noise ratio:
Informally, “signal-to-noise ratio” refers to the ratio of useful information to false or irrelevant data.
The internet is a phenomenal research tool, but noise lurks around every mouse click. Noise is often those enticing links that we follow if we don’t have our guard up. The other day I went online to research the economic effect should the Federal Reserve monetize the debt by buying long term Treasuries. Then I got suckered into clicking into some top 10 list. It’s only 10 items, let me read it real fast. Next thing I know I’m watching a bear attack video on YouTube. How did that happen?
Noise is the empty carbohydrates of information. Not fulfilling, yet often quite tasty. Signal is the nourishment that enriches us. And anyone that has killed a few hours (or years) watching CNBC knows that Noise often does a real good job making itself look like Signal.
Now that Signal to Noise has been covered, I’d like to add a new axis. I’m going to call it Consume vs Create. In our relationship with information, we are either consuming (pulling) data or creating (pushing) data. We may be consuming Signal or consuming Noise. We may be creating Signal or creating Noise. See my lovely chart below.
Although it is impossible to avoid Noise, my goal is to come up with a strategy to minimize Noise exposure. I quit watching CNBC over a year ago once I realized the information was really Noise being peddled by a network that makes its money from advertisers that don’t share my investment philosophy. My investment research went to books, well written newsletters and financial blogs. In that scenario, I traded Noise for Signal and I became a better investor.
The natural pull is toward Noise. Sugar just tastes better. It also easier to Consume than Create. It is far less effort to eat a pie than to bake one. But as I learned from the book Satisfaction – The Science of True Fulfillment, in order to achieve satisfaction one must mix novelty with action. Consumption is passive. Creation requires action.
Enough rambling. The ideal state is to balance time in quadrants A and B and to take action when we find ourselves spending too much time in quadrants C and D. In the book The 4-Hour Workweek, author Tim Ferriss asks his readers to first define what they want from life and then eliminate the unnecessary. How do we keep ourselves from drifting toward the unnecessary?
Periodically ask yourself these two questions.
- Is this Signal or Noise?
- Am I Consuming or Creating?
Once you acknowledge Noise, make an effort to move toward Signal. And if you discover you are always Consuming, recognize that satisfaction requires some Creation.
Thank you for Consuming my Noise. 🙂