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That Old Canard

Summary:
To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever. If there is one defining feature of high attention narrative structures, it is the crowding out of off-narrative topics and language. Since mid-March, financial media has been all-coronavirus, all-the-time. That is, with the exception of the occasional diversion into the nightmarish adjacent world of oil and gas. In the last week or so, however, we have observed a surge in “how the world will be different” language across financial media. We have observed that language in pieces nominally about other things, like earnings, guidance or the fortunes of various

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To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.


That Old Canard

If there is one defining feature of high attention narrative structures, it is the crowding out of off-narrative topics and language. Since mid-March, financial media has been all-coronavirus, all-the-time. That is, with the exception of the occasional diversion into the nightmarish adjacent world of oil and gas.

In the last week or so, however, we have observed a surge in “how the world will be different” language across financial media. We have observed that language in pieces nominally about other things, like earnings, guidance or the fortunes of various industries. We have also observed that language in pieces dedicated to the idea that how we consume X will be changed forever.

Here is one that rose to the top of our Zeitgeist run this morning.

It’s a stretch to say that this piece is really about anything. It is a laundry list of companies, buzz words and CEOs that straddles that line between news, analysis and advertisement that Forbes Contributor content is all about. SEO-bait.

Now, it isn’t a new idea that the COVID-19 pandemic will “change everything about the way we do business forever”. Zoom, Amazon, Netflix and Softbank have been trading on changing sentiment about this idea for weeks. What IS new is that the language is now so ubiquitous in marketing, advertising, puff pieces, corporate statements and actual news that it is creating connections – at least on some slow virus / shutdown news days – that are as strong as the core narratives of COVID-19’s impact on the market itself. It is now common knowledge that every company must tell a story about how it will actually emerge stronger from COVID-19 than it was before.

In short, it is becoming a cartoon.

‘Cartoon’ doesn’t mean that the underlying thing being caricatured is fake or unimportant. Quite to the contrary, most cartoons are built around really emotionally charged truths. And that old canard about companies being purpose-built for the future that technology will bring us? That’s a powerful cartoon because it IS often the most important thing that some companies have to demonstrate to the market or customers, even if it’s a bit silly on its face.

Just as often, however, that same cartoon becomes the sine qua non for all companies and institutions, even those whose businesses are probably just fine the way they are. Or companies who should be thinking more expansively about how this could be an opportunity to transform things about their business that haven’t been working correctly. Or companies who should be thinking about much more important and vastly more difficult to predict second- and third-order effects of an event like this – not “does all this online services utilization during the coronavirus pandemic mean it’s the right time to make our big push into low margin robo-advisory services?”

Remember, it was last year that the institutions who will tell us that their vast experience delivering a premium online experience for a post COVID-19 world were telling us that the future was in personal, physical cafe environments in their brick-and-mortar bank branches. When something becomes a cartoon, it changes how people make decisions in the real world to fit the cartoon.

We are now in the Flooz.com phase of the “how is COVID-19 going to change the world forever” process. Be careful out there.

Rusty Guinn
Executive Vice President of Asset Management, Salient. Rusty Guinn is the executive vice president of asset management at Salient. He oversees Salient’s retail and institutional asset management business, including investment teams, products, and strategy. Rusty shares his perspective and experience as an investor on the Epsilon Theory website.

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