WHY THE FINANCIAL NEWS MEDIA CAN COST YOU MONEY
Below is a MRR and PLR article in category Finance -> subcategory Investing.
Why the Financial News Media Can Cost You Money
Summary:
Listening to financial news can be as misleading as following the Pied Piper!Article:
In today's fast-paced world, we have an abundance of communication tools like the internet, financial newspapers, and dedicated television channels such as CNBC. These platforms offer a continuous stream of information on investing and the stock market. However, it's crucial to remember that these media outlets are competing for your attention and survival. They'll do whatever it takes to keep you watching, sounding authoritative even if they lack full understanding. If you stop tuning in, their ratings drop, resulting in job losses and canceled shows.
Financial journalists are driven to unearth compelling stories and portray themselves as experts. The stock market provides them ample material, but fact-checking is often sidelined. Insiders who want to mislead the public can easily do so through established media connections, sponsoring investment shows, or even owning channels, as Jack Welch did with CNBC. This setup is advantageous for insiders but not for you.
Journalists further complicate matters by featuring so-called experts who debate topics real experts might dismiss as trivial. This approach only adds to the public's confusion about stock buying and selling. Shows like "Closing Bell," "Kudlow & Company," and "Mad Money" often mislead individual investors. Worse, they sometimes allow overpriced stocks to be recommended by analysts connected to insiders who are secretly offloading their shares, as occurred during the 1999 bull market. For a detailed account, Maggie Mahar’s book "Bull" is an essential read.
Renowned Yale economist Prof. Bob Shiller criticizes the media in his book "Irrational Exuberance," describing it as driven by sound bites and superficial opinions. According to Shiller, the industry prefers to keep retail investors confused and emotionally susceptible, encouraging them to buy and sell on whim without their best interests at heart.
Many lost their life savings as the financial media hyped stocks at their peak in 1999 and 2000, just as insiders were selling theirs. Shockingly, the Securities and Exchange Commission took no significant action, and there was no public outcry about the insiders' timely exits.
Here's a crucial tip for beginner investors: Avoid watching financial news or reading financial newspapers. Don’t let the stock market industry lead you astray. Instead, focus on educating yourself about the fundamentals of the stock market. The mainstream media will only cloud your understanding until you're better informed.
Recommended Reading:
1. Mahar, M. "Bull! A History of the Boom, 1929-1999" (New York, HarperBusiness, 2003)2. Shiller, R. "Irrational Exuberance" (New York, Broadway Books, 2000)
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