Narrative versus Reality
I had seen an interesting tweet by Benedict Evans in an email by entrepreneur and writer Shaan Puri. I reproduce the tweet as well as Shaan’s take on it.
Narrative: Facebook is making billions off our data!! We need our own social network where we OWN our own data.
Doesn’t the narrative sound good? Let’s look at what the reality is.
Reality: Your data is pretty worthless. One of the smartest companies in the world is able to make $0.99 in a quarter. How much do you think you will be able to make with your data?
Likewise, there are so many narratives in the world of investing. Some of them are –
a. Someone somewhere knows how to beat the markets. We just have to find them.
b. You have to beat the benchmarks to be a successful investor.
c. More Risk = More Returns
d. PMS gives higher returns than mutual funds
e. AIFs and structured products are necessary and only if you do this, are you doing wealth management
f. I am protecting my capital with fixed deposits (such an amazing narrative)
g. And many more
Many are things that we want to hear. All of the above narratives are bullshit and noise that distract us from doing what’s truly important (and what’s best) for us.