Too Much Information!

Information comes at us from all sides, these days. We have smart phones, smart cars, a smart electric grid, and I can check the latest sports app to see my nephew’s downhill skiing results in real time.

What do we do with all this data?

The easy answer is to ignore it. Or at least to ignore the parts that we don’t like. If we don’t want live tweets of the air traffic of the coast of England, we don’t need to follow them. But that forgets the fact that more data are available. Not just self-styled pundits in the blogosphere, but real-live data. With the right screens and feeds anyone could have known about the Libyan bombing or Greek rioting before the images went live on CNN.

The key is to understand the difference between data, information, and knowledge. Data is raw numbers: ones and zeroes on a digital drive. It can be massaged, managed, and manipulated. It’s the basic stuff of life. Twitter feeds are often raw data. Information is that data coalesced and managed. Government labor reports and company outlooks are information. Think of data as nutrients and information as different types of food.

But information isn’t enough. Different foods need to be combined into meals. That’s knowledge. Knowledge combines the BLS employment report with Census data to conclude that more people are retiring, and they’re not coming back into the labor force, so there won’t be an army of discouraged workers re-entering the workforce soon. Knowledge helps us understand that low bond yields and a strong corporate sector portend healthy equity returns over the next 10 years.

By recognizing these distinctions, we can start to make sense of the information overload we experience every day. And use improved knowledge to make better decisions.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

Follow me on Twitter @GlobalMarketUpd

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By |2017-07-17T12:34:57+00:00February 21st, 2012|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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