Masters in Business – How to Use Narrative Information

Host: Barry Ritholtz (Bloomberg)
Guest: Ben Hunt (Perseant)
Date: November 26, 2025

Episode Overview

In this episode, Barry Ritholtz explores the concept of narratives in investing with Ben Hunt, founder of Perseant. The discussion delves into how stories—rather than just fundamentals or raw data—shape market behavior and valuations. Hunt explains how narratives form, spread, and influence investment decisions, and how advanced technology and big data now allow investors to systematically study and even exploit these powerful market forces.

Key Discussion Points and Insights

1. Defining "Narrative" in Markets

• Hunt’s Definition:
  • "A narrative is an answer to the question, why? Why did the market go up today? Why should you buy this stock?"
  • (Ben Hunt, 02:36)
• Any explanation attached to events or numbers is a story:
  • Example: “This stock is cheap with a PE of 9” is a narrative if it’s answering "why" you should invest.
  • (Ben Hunt, 03:18)

2. Distinguishing Narrative from Data

• All meanings attached to data (like valuation multiples) are inherently narrative; it’s about the interpretation, not just the numbers.
• Quote:
  • “Any valuation, any multiple, any meaning that you attach to numbers. It's a story. It's an answer to the question, why. Why do I call it cheap?... Those are all narratives.”
  • (Ben Hunt, 03:18)

3. Analyzing the Influence of Narratives

• Ben Hunt’s Focus:
  • Not on truth or accuracy, but on how and what is being presented to the crowd.
  • He analyzes word choice, volume, frequency, and network density—how words cluster and connect in discussions.
  • (Ben Hunt, 04:23)
• Key Measurement:
  • “Density”—the interconnectedness of language in networks, which can be measured mathematically (betweenness, centrality).
  • (Ben Hunt, 04:23)

4. Narratives and Epidemiology: How Stories Spread

• Analogous to Disease Spread:
  • Citing Robert Shiller’s Narrative Economics, Hunt likens narrative spread to virus transmission (basic reproduction number, “R naught”).
  • Narratives propagate through media (the “medium”) like viruses through air or water.
  • (Ben Hunt, 05:36)
• Memorable Moment:
  • “We're really using exactly the same math as you would use to try to understand epidemiology and the spread of a virus.”
  • (Ben Hunt, 05:36)

5. Types of Narratives: Descriptive vs. Prescriptive

• Descriptive Narratives:
  • Explain why something happened, always after the fact (e.g. post-earnings stories on financial stocks). These tend to be short-lived and are often best faded.
  • (Ben Hunt, 08:05)
• Prescriptive Narratives:
  • Attempt to shape future events or behavior (e.g. prominent figures calling for Fed policy changes).
  • These can be powerful early signals.
  • (Ben Hunt, 10:04)
• Quote:
  • “There's another type of narrative... we call prescriptive narratives. It's not saying, 'Oh, the Fed is dovish,' it's saying Mohamed El Arian... will come out and say the Fed should be dovish. You see the difference?”
  • (Ben Hunt, 09:47)

6. Identifying and Exploiting Narratives with Technology

• Traditional vs. Modern Approach:
  • Good traders have always “read” the crowd, but now big data and AI let you quantify and analyze all published words.
  • (Ben Hunt, 10:28)
• Output of Analysis:
  • AI and analytics don’t tell you which narratives matter—humans must specify which stories are relevant (e.g., a dormant value investing thesis).
  • The goal: Spot when dormant narratives start gaining traction—the “discovery phase.”
  • (Ben Hunt, 11:55)
• Quote:
  • “You can't start this from asking AI, 'Hey, AI, what are the prominent stories right now?'... The way to really make money with narratives is... to see when [a dormant story] starts to get discovered.”
  • (Ben Hunt, 12:34)

7. The Future of Narrative Investing

• Not a New Idea:
  • The notion of tracking and acting on market stories is old, but technology allows this to be systematized and democratized.
  • (Ben Hunt, 13:49)
• AI enhances the scale but doesn’t replace the human element in identifying meaningful narratives.
• Quote:
  • “What's possible today is to externalize what good traders have internalized in the past... I hate to call it democratizing investing... but it really is a notion of creating a new instrument.”
  • (Ben Hunt, 14:34)

8. Practical Takeaway

• Machines can now “read everything,” giving investors unprecedented ability to detect narrative shifts.
• When narrative changes, so does behavior and potentially market movement.
• Memorable Summation:
  • “What you're looking for is what's new, what's changed. Because when the narrative changes, that changes behavior.”
  • (Ben Hunt, 15:55)

Notable Quotes

• “A narrative is an answer to the question, why?... Any meaning that you attach to numbers... those are all narratives.”
  (Ben Hunt, 02:36, 03:18)

• “I've given up on trying to figure out what reality is. What I'm trying to figure out is how is reality being presented?”
  (Ben Hunt, 04:23)

• “You should think about and understand narratives in exactly the same way you... understand disease.”
  (Ben Hunt, 05:36)

• “People hate that answer because it's a crappy story, right?... I want a story.”
  (Ben Hunt, 07:25)

• “You can't start this from asking AI... what are the prominent stories right now?... The way to really make money with narratives is... to see when [a dormant story] starts to get discovered.”
  (Ben Hunt, 12:34)

• “When the narrative changes, that changes behavior.”
  (Ben Hunt, 15:55)

Important Timestamps

• [02:36]: Defining "narrative" in investing
• [04:23]: Analyzing narratives—focus on presentation, not just truth
• [05:36]: Comparing narratives to the spread of disease (epidemiology analogy)
• [08:05]: The role and limitations of descriptive narratives
• [10:04]: Introduction of prescriptive narratives
• [11:55]: Human input and the search for dormant narratives using AI
• [13:49]: The narrative about narrative investing and its democratization
• [15:55]: The practical impact: narrative shifts driving behavioral change

Episode Summary

Barry Ritholtz and Ben Hunt deliver a rich, practical exploration of how stories shape markets. Narratives—answers to "why"—are as old as investing itself, but today’s technology allows us to systematically observe their formation and spread. Rather than merely parsing the “truth” of any single data point, modern investors can use network math and big data to identify and act on the narratives that drive collective market behavior, especially during those crucial moments when new stories emerge and begin to influence decision-making at scale.