Sound bites, yuck. There’s a sound bite right there. The distillation of a complex issue into as few words as possible can be artistry, but taken too far can be tragic. A bit of time and heat can produce a marvelous gravy from some wine in a dirty roasting pan, but cook it down to far and you end up with tar. Unfortunately, there isn’t enough time to accommodate complex understanding about every issue, and sometimes the simplest phrase is best. The trick is knowing when each is appropriate, in society, in investing, in introspection.
Calling something a sound bite is frequently derogatory. The speaker glossed over the topic, maybe to avoid inconvenient truths, like the stereotype of the used-car salesman. Low Mileage; yes, but they were all spent in salt water launching boats. Rust anyone? Feel free to pick your own examples from political pronouncements. There are so many that the news is usually nothing but sound bite interviews with sound bite commentaries. It makes great material for our national jesters of Stewart and Colbert. Sometimes they don’t even have to write anything, just pick from the day’s odd bits. In that regard, politicians are the victims of the limited time the media has to cover a story. They have to use sound bites to get the message out, but there is a built-in probability of mis-understanding.
Sound bites are necessary because there are so many things to talk about. Elevator pitches are based on the idea that someone usually only has the attention span of an elevator ride to become interested in a new idea. Isn’t that the basic idea behind the pick-up line? The dramatically short sales pitch for some type of interpersonal relationship, which encompasses a wide variety of possibilities. In either case, volumes of material is ignored and left for later discussion, which is only presented if the sound bite was successful.
Sound bites are also necessary as rally points. They may fit on a sign or a bumper sticker or act as a headline. More successful sound bites are easily remembered and shared. Communities form up around them. “No taxation without representation.”
Living a life based on sound bites is like dining purely on frosting. It is superficial, can be sweet, but in the long run isn’t healthy. Tweets can be a good way to find the hot topics, but the real story remains in longer forms. Thank you mini-urls. Thank you wikipedia.
Unfortunately, entire communities seem to never get past the sound bite. I’ll skip the political examples and retreat to the safer realm of investing. Much of Wall Street is based on overly-distilled data. With thousands of companies to research, most analysts can’t take the time to dig into more than a few, and I suspect that most of them are asked to understand dozens or hundreds of companies. They can’t get very deep into any concept. There are always a few per company though that do have deeper understanding, but it seems that their insights aren’t free.
Wall Street’s superficiality is an individual investor’s opportunity. Some companies have stories that can be reduced to a sound bite. Conventional wisdom was that Starbucks was just selling coffee. That distillation was incorrect and too reduced. After the company began to succeed, the story was more about the personal indulgence that the coffee embodied. The second sound bite was longer, based on ideas that where presented originally, and finally more correct.
I tend to invest in companies that appear to be more complicated than Starbucks for that very reason. Even the limited time I spend investigating them is more attention than they typically get from the professionals. Currently I am invested in an innovative biotech called Dendreon (DNDN). There is great misunderstanding in the press reports, which is understandable considering the technology; and sad, because it is probably an dramatic improvement in cancer care.
The media’s sound bites about Dendreon focus on it’s prostate cancer vaccine called Provenge. The sound bite is something like, “It costs $93,000 and only extends life four months.” Sounds like there’s no reason to consider if for anyone except the super-rich. Dig a bit deeper though and the data shows that $93,000 is less than some are already paying for treatment; and that the four months are the median, some see no benefit but some live for years. The side effects of chemo are horrific to most, while the side effects for Provenge are usually nil or a mild flu for a few days. And the data are based on treating patients that had advanced cases. It might even work better if administered earlier, or in conjunction with other treatments. Have I gone on too long? Even that slight extension of the description leaves out any description of the technology or other implications.
Many companies have such stories, stories that can be well understood with an hour per week of research. That’s about all I spend on those details. It has benefited me and my portfolio.
I could go on about sound bites and word choices. Any author can because part of writing a book is deciding what’s too many words and what’s too few. But I will pass along one nugget that I’ve considered frequently. The most well-known sound bites are the Ten Commandments. I was raised Catholic so I am very familiar with my listed opportunity for guilt. Imagine the implications though at the distillation of one of those phrases. “Thou shalt not lie.” As I understand it, the original is closer to, “Though shalt not bear false witness against thy neighbor.” Is it then a sin to bear false witness for thy neighbor? How about for a stranger? Maybe all those white lies I did penance for weren’t sins at all. Maybe it pays to remember what sound bites are. They are bites. A full meal requires chewing on things a lot more.