This blog post originally appeared on RealMoney Silver on May 23 at 8:02 a.m. EDT.
"The generation that had information, but no context. Butter, but no bread. Craving, but no longing." -- Meg Wolitzer (referring to today's high school students), The Uncoupling
Back in 1930,
, "Well, here is another nice mess you have gotten me into," which brings me to the role of technology (especially social networking) and the (potential) mess that it might get some into.
The New York Times
magazine section over the weekend, Bill Keller writes an intriguing column entitled "
," which highlights social media as an enemy of contemplative thought.
Nicholas Carr's "
"cover story in
from 2008 argues that the Internet has had detrimental effects on cognition that diminish our society's capacity for concentration and contemplation.
Technology brings with it progress and enhancements to our life and, often, savings to consumers -- we generally gain more than we lose -- but there is a downside to its transformative role and the staccato pace that accompanies its innovation.
- The television muffled creativity, discourse and interaction.
- The typewriter killed penmanship.
- The pocket calculator reduced a generation's math skills.
- GPS impaired our sense of direction.
- Texting diminished our language skills and our vocabulary.
- Our memory capacities have been weakened by Google.
- The ephemeral nature of social media such as Facebook and Twitter, creates stunted relationships and has damaged our attention span -- they are almost asocial.
"Before we succumb to digital idolatry, we should consider that innovation often comes at a price. And sometimes I wonder if the price is a piece of ourselves."- Bill Keller, "The Twitter Trap"
To some degree, technological innovation has penalized patience, limited the emphasis on wisdom and has even de-emphasized intimacy. We may be at risk of losing our souls, and, in the long run, our relationships are worse off.
And what about our investing? What role has technology had on influencing our analysis, our actions and our investment results?
Here are some examples of technology as a disruptive force in investing:
- Portfolio insurance was an important contributing factor, if not the cause, of the October 1987 stock market crash.
- Quantitative models/strategies have likely fostered and exaggerated group/stock moves to levels above and below intrinsic value.
- High-frequency trading was likely the catalyst to the May 2010 stock market flash crash.
- A dependency on 140 characters while tweeting and/or the use of message boards simplify a trade or investment.
Perhaps we, as investors, will all survive the current obsession with technology. But I am increasingly concerned that we are simply too wired and that we have become addicted to the "dopamine squirt" of interconnectivity generated in the delivery of information on Twitter, Facebook and with our instant messages received on our iPhones and BlackBerries (among other platforms).
Fast and simple can be superficial, stupid and harmful to one's investment/financial well-being as there is no substitute for doing your homework.
Doug Kass writes daily for
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At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.
Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.