Last week I attended the Morningstar Investment Conference, a gathering of financial advisors, economists, fund managers and others from the world of financial services in Chicago, IL. The two and a half days are full of breakout sessions around investing, practice management, etc. I won’t bore you with those details which, while very exciting to us, can be a little dry to most.
The keynote speakers, on the other hand, carried broader appeal. We heard from Michael Lewis, best-selling author of Liar’s Poker, Moneyball, Flash Boys, The Big Short and his most recent, The Undoing Project. We listened to Larry Fink, CEO of industry titan BlackRock talk about the challenges of running the world’s largest asset manager at $5.4 trillion (yes, that’s with a T).
But the most interesting discussion to me was with Jimmy Wales, the co-founder of Wikipedia. If you’re unfamiliar, per their site, “Wikipedia is a multilingual, web-based, free content encyclopedia project supported by the Wikimedia Foundation and based on a model of openly editable content. Wikipedia’s articles provide links designed to guide the user to related pages with additional information.”
In other words, a giant online encyclopedia. If you’ve asked the internet to define something, answer a question or just entered a general search term, it’s likely the first or second website in your search results. Depending on how you measure websites, it’s roughly the fifth largest in the world.
Early on, Wikipedia got a bad rap. There were very few people in the world with access to the internet. Making Wikipedia fully editable by virtually any user allowed for a lot of false information. There were also a lot of gaps, things you couldn’t find online that you could more easily in a library or using an encyclopedia. My how things have changed.
Today, Wikipedia contains more than 42 million pages in total, about 41.99 million more pages that my Funk & Wagnalls growing up. The site receives 400 million unique visitors and is accessed by more than 1 billion separate devices each month. There are more than 30 million registered users who have made nearly 1 billion edits to those pages. Most pages have been translated into 288 languages. This is all done with just 270 paid staff and largely funded through donations made through the site and the work of the Wikimedia Foundation cited above.
With that many eyes watching the data that’s posted, misinformation certainly slips through the cracks, but much less than in the past. When virtually everyone uses you as a resource for information, it’s very difficult for any false data to last any length of time without being corrected.
Wikipedia & Investing
This reminded me of a blog we wrote a few years ago on jelly beans, the wisdom of crowds and how we view markets and invest our clients’ assets. Believing that markets are efficient in no way means they’re perfect. We acknowledge that there are mispriced companies in the market at any given moment. We don’t believe these can easily be identified in advance. Even if they could be, it wouldn’t help answer the question of when exactly to buy or sell.
This is especially true in this wiki-day and age. There are millions of investors all over the world. In addition, there are countless institutional traders and high frequency computers trading based on whatever algorithm they think gives them an edge. If the market perceives a mispricing, it will likely be corrected in the blink of an eye. In a world where everyone has access to information, the opportunities to take advantage of substantive errors become extremely scarce.
Can Wiki Fix the Media?
One area that clearly needs some attention in this area is our current media. We unfortunately live in the age of fake news – truly fictional articles pumped into our search engines, social media and other sources to draw clicks, spread rumors and market products in bad faith. In addition, our traditional media is, at best, eroding under pressure of selling ads often controlled by political, financial and other sources with agendas outside pure journalism.
Jimmy Wales wants to take his model to the world of media. The day before speaking at the conference, he announced the launch of Wikitribune, something he calls a hybrid model of pro-journalists and the public providing evidence-based journalism in the “Wiki Way.”
Time will tell how successful this will be. I suspect it will hit more than a few speed bumps at the start and will take a while to find traction. But, I also firmly believe in the notion that we’re all smarter together than we are on our own. If we can report, verify, double and triple check news in virtually real time, we’ll all be much better off in having more reliable sources for information in the world.