One reader noted that the business model of television is to sell advertising. While that is true, news channels tend to want to report the news as well. There may be, and probably are, biases and conflicts that exist in the running of a network, conflicts and biases from some portion of the reporters and conflicts and biases from some portion of the people being interviewed but if something bad happens to Archduke Ferdinand during the day then chances are it is going to get covered.
If, as I said yesterday, you have eight tabs open on your browsers with articles to read and you do not have your TV on a news channel and something big happens then you will not know about it for a while. While knowing that something has happened may not result in a trade some people would want to know right away and some would not care. Which are you? The answer to that question contributes to whether or not your TV is likely to be tuned to a stock market channel.
Occasionally the news will trigger a trade and in those instances, timeliness matters. A few May's ago I woke up one morning, flipped on CNBC and the news of the morning was that Microsoft (MSFT) wanted to buy Yahoo (YHOO) which we owned at the time. Generally I am a seller right away if a holding catches a bid. The highs of the day were in the premarket and obviously the stock has not been that high since. It is not knowable how quickly in the day I would have stumbled across the news but by flipping on the TV first thing it was literally the first piece of news I had that day.
A different example I have used before was the GM bankruptcy. We did not own the stock or the debt but it was a big story and it was talked about to excess on CNBC whatever the biases and conflicts of anyone talking about it. This saved me time reading about something that realistically had no direct effect on the portfolio. I think that is a constructive leveraging of time.
For people reading this site who are advisors they have clients who will ask questions about newsy things that probably have no direct impact on the portfolio. In that instance "I don't know" is not an answer you want to give. Too many "I don't knows" and you probably start losing clients. For some who work in the industry there is the opportunity to talk about these things in the media. I appear on CNBC two or three times a year which at that frequency is a fun novelty and has opened the door to some experiences I would not have otherwise had. It is ok to have fun with your job.
More important to the portfolio is that if you are a top down person then the important decision of being defensive or not is based first on the big picture of the world. Being a news junkie has helped us over the years, especially with what to avoid. I've disclosed in previous posts that we sold Barclays in December 2007 and Allied Irish Bank in March 2008 in part because "how many times are you going to read that the housing market in the UK and Ireland are in serious trouble before you sell." Having CNBC Europe on for an hour every mid morning contributed to that and these turned out to be important sales.
This utility can still exist while you tune out Jim Paulsen and Thomas Lee.
Any or all of the above might sound exactly right for you or utterly ridiculous but again there is no single way right way. Media outlets are a tool to be used as much or as little as you see fit.
One add on about Twitter. I keep my feed open all day. I Tweet three or four times during market hours, usually linking to something I read and adding something that is hopefully useful (or occasionally funny) about the link--yesterday I made a joke about the recent frequency of sovereign ratings changes lately being like the speed dial episode of Seinfeld. There is a lot of useless stuff on my feed to be sure but there are also many links tweeted that are useful reads that I would not otherwise find. Again it is a tool to either use or not use.The Red Sox hired Bobby Valentine as their new manager. Based on where the team was on Labor Day, this is a true Black Swan.
24 comments:
I listen A LOT
I trade very little. Your argument seems valid for you. I read it and say just another reason to only own etfs.
to each his own
btw I saw housing more than a year a way. I did not need cnbc telling me housing was an issue
As usual, Roger your practical perspective on the media is spot on. I usually toggle between Bloomberg and CNBC in the mornings and late day to catch-up on the pressing stories. However, expecting in-depth analysis from either channel is akin to finding the meaning of life within a People Magazine while at the dentist office. I suppose it could happen, but meanwhile reading about those poor Kardashian kids does draw my eyes to an ad or two.
BTW - keep the alerts going when you appear on CNBC, you're no Kardashian, but I enjoy watching you talk!
quite pleased you don't think of me as a Kardashian....
Uh oh... given what's happening in the market right now, I suspect there's going to be a cartoon posted soon, showing a lot of happy looking animals dancing and pointing their hands and fingers up in the air! Yipee! :-)
- aagold
Central Banks are just helping insure Santa's Rally this year.
You think Nov 30 looks good, just check back on Dec 30th - WOW
Politicians can't move but central bankers have been talking to each other http://tinyurl.com/88l5y4y so the monetary gates are open again.
The market melt up will be fun (and profitable of course) but don't look for it to last unless there is a substantive fiscal policy response.
RW knows all. Just ask him.
RW has been predicting the end of this bull market since he initially called it a bear market rally in 2009.
He WILL eventually be right :)
Personal attacks between readers ends now. Going forward these comments will be deleted. Attack a reader's position; that is fair game. Attacking him personally wastes everyone's time and obviously does nothing to advance the conversation.
I hate this market
I guess the analogy of the market being a horse trying to throw a rider off with its gyrations is appropriate here.
I will stick with this bull that I hate, because I want the profits
Thanks Roger re the attacks. It's gotten tiresome. Good call on SDS.
Sam
Roger,
RW frequently tries to point out that I am an idiot. I have little to no understanding of the economy. I could go on, but I think you get my point.
People that do not agree with him posted today.
Is this a one way street?
is he attacking your argument or you? feel free to point out any attack in future comments that are directed at a person and not an argument and they will be deleted.
Something like "that doesn't make sense because..." seems like attacking an argument, if there have been personal attacks I am unaware of (which very well could be) then they might continue and you can point them out. If my comment today ends any perception of personal attacks on both sides of the street that would be all the better.
For those of you who can't wait until tomorrow :)
http://tinyurl.com/4xfjchs
One of my favorite posts by the way, thanks Roger!
I dug up something else that hopefully will have a little humor to it.
Ritholtz pointed to an article that suggested this coordinated action on liquidity might be because of a potential failure of a large bank in Europe. Interesting idea.
is he attacking your argument or you?
BOTH
I would agree that a certain poster's comments frequently seem condescending but at times he has interesting things to say. I believe he sort of acknowledged that about two weeks ago when he said "duly noted." to someone complaining about him being such a know it all. I hope he doesn't quit posting, but takes some of these comments to heart.
Found a good explanation of the coordinated central bank liquidity move at http://tinyurl.com/6ozc884
Given how nervous global markets have been over the European situation I was somewhat surprised the CB action wasn't even more forceful. As the article points out, when insecurity about the financial system takes root, it doesn't take much to start a bank run.
PS and OT: Insults from anonymous parties lack meaning and apologizing to same doesn't make a lot of sense. Ad hominem argument is equally lacking in meaning though so, if anyone can find an example where I insulted the person rather than their statement(s), I will apologize for that act. 'Nuff said.
anonymous said
I really do not remember all the condescending remarks from RW, but arm chair Austrian economist comes to mind.
the rest is deleted as perceived by me as being personal.
christ on a bike if the comments need to be moderated in this manner
Roger,
Looks like the market is getting close to the 200 DMA. For your taxable accounts, would you buy shares of a mutual fund or ETF if it is just days before the fund pays a dividend? or would you wait until after the dividend is paid?
In other words, what takes precedence, following the timing signal or avoiding buying the dividend? A lot of equity funds pay dividends in December.
no great answer for you. of the possibility i am considering right here, none of them are funds.
while i would not buy a fund the day before the ex-date i'm not sure how far ahead I would be willing to buy. it has never been an issue-perhaps that has been a coincidence.
Thank you.
7:52
This is a great post. I stopped reading this blog regularly because I don't have the time or inclination to trade anymore. My money's in cash doing zilch but I'm looking at various things
such as starting a buffalo farm in southeast asia. Not joking. A buffalo yields 400% profit in 4 years. Even in India some people are starting to eat buffalo meat.
Anyway I agree with you that being attuned to the media (eg, having the TV on cnbc asia or europe) while you are doing other things is a useful way to ingest information even if it is partially false or biased.
Jim
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