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The communication innovations we have around us today like the internet, financial newspapers, and special interest television channels focused on investing like CNBC are a high speed pipeline of nonsensical chatter. All these sources of information mean that there’s no shortage of media people attempting to answer our questions regarding the stock market and specific stocks. You have to remember the news media are constantly competing to live against other stuff you’ll be able to see. If they do not always sound like they understand just what’s going on then you will not watch their presentations. If you don’t tune into their show their ratings go down. If their ratings go down they get fired as well as their show gets cancelled.
What this means is that fiscal journalists are in the company of finding great narratives and seeming like authorities no matter what. The stock exchange is an excellent place in order for them to dig up news’ to feed to the general public. They do not actually check their facts very well and sometimes not at all. This means that if some insider wants to feed you a line of bull manure then all they must do is keep good connections with fiscal journalists, sponsor an investment show, or outright buy an investing TV channel like Jack Welch the CEO of GE did when he set up CNBC. What an excellent way for executives that are inside to control the flow of news information to the general public to actually own one of the sole fiscal news channels…but not so great for you!
These journalists also kick up the fire by bringing in so called ‘experts’ to talk about each side of some issue that actual experts wouldn’t consider important.
This just makes it even more confusing for the public to recognize what is very important when buying or selling a stock. Even worse this means that the financial news media enables overpriced stocks to be advocated through analysts in the internet that is inside since they are attempting to get out that inside executives are dumping on the people. This actually occurred in 1999 at the top of the bull market. For an excellent historical description of what occurred read the publication entitled of Maggie Mahar “Bull.”
The famous Yale University Economist, Prof. Bob Shiller, Ph.D. is particularly harsh on the media in his publication “Irrational Exuberance.” Dr. Shiller is one the economists that Alan Greenspan honors most and where he got the term “Irrational Exuberance.” He depicts the media as sound bite-driven where superficial opinions are favored over in-depth evaluations. I claim it is also done just since the industry would rather have the retail investor confused and emotionally pliable to get you to purchase and sell when they desire with total disregard for your best interests and agree whole heatedly with him!
Folks who had invested their life savings in the stock market were ripped off in the stock exchange as analysts and the financial news media were hyping up what an excellent buy stocks were at the very top of the market in 2000 and 1999. At the same time inside corporate executives were selling out everything they’d. What is amazing is that our federal government in the type of the Security Exchange Commission never did a thing about it. There was never a blanket instance considered or an outcry that the inside executives almost all had somehow magically sold out of the market six months before the market crashed.
Here is the valuable tip I would like you to consider: when you are a beginner investor it really is important that YOU DON’T SEE THE FISCAL NEWS OR READ THE FINANCIAL NEWSPAPERS! Don’t listen to what they want you to listen to. You need to concentrate on learning what is important in the stock exchange and you will only confuse until you have prepared yourself.