Or, Maybe This Is Why Stocks are Rallying…
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2 comments:
I have theory about the financial news industry and it isn't very flattering. I believe financial journalists (especially those who are tasked to cover the market as a daily/hourly horse race) basically create 'stories', make-up a line of rationale why a market gained or lossed - whether it's really the cause of the market action or not. They can't just come out say "The Dow was up 45 points today because...there were more buyers than sellers". The news media has to have a story angle to everything. The pitiful thing is average folk believe the markets are driven by daily news events, when in reality, the markets are driven by huge institutions rebalancing their portfolios.
You can see this unfold before your eyes on sites like marketwatch.com. Example: 10:00am Stocks Pounded Due to Inflation Jitters - 11:00am Stocks reverse and move higher as investors shake off jitters 4:00pm Stocks close down in anticipation of weak earnings.
I have a challenge for news organizations. Put your best financial journalists in "solitary confinement" for one week and only feed them all the newswires they can handle, but redact any mention of market prices. Then ask them at the end of each day which markets were up/down and by how much?
I love this challenge. I hope this comment makes it up the media food chain. Could we have a reality show for the talking heads, isolated at their favorite resort, all the news ex mkt prices their heart desires?
Was there not a famous opera performer in the 19th century who made a fortune trading stocks while travelling and totally out of touch with wall st "stories." He just used raw data. But, when he came back to New York, his trading went down the tubes. Too much media noise.
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