Like many, the current events in the financial markets have me a bit dazzled. I understand a lot more than I did a few weeks ago from reading blog posts, newspaper articles and a small book or two. I also have been watching CNBC and Fox Business which have had a lot of interesting information on them as well. But I have a reservation. Whenever I see a report on CNBC or soak in a few pixels of information on a website I get a certain empty feeling. I feel as though I am being played. These information outlets feed on advertising for their lives, after all. Blood always leads, even on the financial pages.
The very best thing I have read on the current situation was in the WSJ weekend edition a week ago. It wasn’t “world ending” stuff, and it was easy to understand and concise. Several articles in the same edition were excellent.
In these tough times, the media does it best to convey the impression that it’s really looking out for the best interest of the humble investor.
In its September 28, 1998 issue, Fortune’s cover screamed: “The Crash of ’98. Can the U.S. Economy Hold up?” The Managing Editor explained that Fortune was “dedicated” to making sense of the “scary” financial situation.
I am not trivializing the current financial crisis. I have no idea what the direction of the markets will take in the future. What I do know is the financial media have a vested interest in hyping extreme conditions because it is in their economic interest to do so.
Investors can learn from the terrible track record of the media in predicting the future of the markets. They are not a reliable source of information.
What are your alternatives?
Consider the 80-year history of the markets, which have experienced ten bear markets. Look at long-term risk and reward data. Read books that have peer review, academically tested data supporting intelligent investing principles. There has been a trend by authors of these books to write them in way that is easily understood by everyone…
…Ignore the financial media, unless you find it entertaining.
The big wooden horse the Greeks gave the Trojans was not a gift. Neither is the information provided with such confidence by most of the financial media.
The article is appropriately named Kissing Cousins: The Wall Street Collapse and Media Hype.