Why Financial News Media Can Cost You Money


The advancement in communications we have today, such as the Internet, financial newspapers, and investment-focused television channels such as CNBC, are high-speed news outlets full of gibberish. 

All of these sources of information are indicators that there is no shortage of people in the media trying to answer our questions about the stock market and especially about stocks. You have to remember that the news media are constantly competing for survival against other channels, which you may or may not watch.

If they don’t sound like they know exactly what’s going on or what’s hot, then you stop watching their performances. If you don’t tune in to your shows, then your schedule rates go down. If their ratings drop they are fired and their presentation is canceled. 

This means that financial journalists are in the business looking for news or great stories in order to project themselves as the authority on the matter, no matter what they are talking about. The stock market is a great place for them to look for tabloid news that feeds the public. They don’t check the facts very well and sometimes they don’t.

This means that some insider who wants to provoke a false expectation all they have to do is maintain good connections with financial journalists, sponsors and investment shows, or openly buy a television channel as Jack did. Welsh, CEO of GE when he created CNBC.

What a great way for manipulative executives to control the flow of information that the public receives through owning one of the few financial news television channels!… But this is not so good for you.

These journalists also stoke the fire by bringing in great “experts” to speak from different points of view on an issue that true experts do not consider important.

This only makes it more confusing for the public to understand what is important when buying or selling securities. CNBC shows like “Closing Bell,” “Kudlow & Company,” and “Mad Money” do nothing but confuse and misdirect most of the investments that are in the public.

Worse, this means that the financial news that comes out allows overvalued stocks to be recommended via analysis on the Internet, when manipulative executives try to exit the market. This happened at the peak of the market rise in 1999. For a great historical description of what happened read Maggie Mahar’s book “Bull.” 

The famous Yale University economist, Prof. Bob Shiller, Ph.D. he is particularly harsh on the media in his book “Irrational Exuberance”. Dr. Shiller is one of the economists, most respected by Alan Greenspan (chief executive of the Federal Reserve of the United States) and from whom he obtained the term Irrational Exuberance. 

Dr. Shiller describes the media as a place where superficial opinions are preferred over deep analysis.

I fully agree with him and understand that it is also done only because the industry prefers to have the confused and emotionally vulnerable individual investor to sell or buy when they want with complete disregard of the best interests of the investor.

People who had invested their life savings in the stock market were looted because financial news in the media and analysts were exaggerating what a large stock purchase was at the very peak of the market rise in 1999 and 2000.

At the same time the manipulative corporate executives sold everything they owned. What is amazing is that our Federal Government in the form of the “Security Exchange Commission” never did anything about it. There was never any case or protest against these executives, who somehow magically sold all of their shares six months before the market crashed. 

Here is some valuable advice for you to consider: If you are a beginning investor it is important that you DO NOT WATCH THE NEWS OR READ THE FINANCIAL NEWSPAPERS! 

Don’t let the stock market bankrupt you. Don’t listen to what they want you to hear. You should focus on learning what is important about the stock market before you act. The press is only going to confuse you until you’ve educated yourself.

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