Bad News - Why The Financial News Media Can Cost You Money!
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 is no shortage of media people trying to answer our questions about the stock market and specific stocks. You have to remember that the news media are constantly competing to survive against other stuff you can watch. If they don't always sound like they know exactly what is going on then you won't watch their presentations. If you don't tune into their show then their ratings go down. If their ratings go down they get fired and their show gets cancelled. This means that financial journalists are in the business of finding great stories and sounding like authorities no matter what. The stock market is a great place for them to dig up news 'scoops' to feed to the public. They don't really 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 have to do is maintain good connections with financial 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 a great way for inside executives to control the flow of news information to the public then to actually own one of the only financial 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 topic that real experts would not consider important. This just makes it all the more confusing for the public to understand what is important when buying or selling a stock. Shows on CNBC like 'Closing Bell', 'Kudlow & Company', and 'Mad Money' do nothing but confuse and misdirect the attention of most individual investors in the public. Even worse this means that the financial news media allows overpriced stocks to be recommended through analysts in the inside web that inside executives are dumping on the public because they are trying to get out. This actually happened at the top of the bull market in 1999. For a great historical description of what happened read Maggie Mahar's book entitled "Bull." The famous Yale University Economist, Prof. Bob Shiller, Ph.D. is particularly harsh on the media in his book "Irrational Exuberance." Dr. Shiller is one the economists that Alan Greenspan respects most and where he got the term "Irrational Exuberance." He portrays the media as sound-bite-driven where superficial opinions are preferred over in-depth analyses. I agree whole heartedly with him and contend that it is also done just because the industry would rather have the retail investor confused and emotionally pliable to get you to buy and sell when they want with total disregard for your best interests! People who had invested their life savings in the stock market were ripped off in the stock market because the financial news media and analysts were hyping up what a great buy stocks were at the very top of the market in 1999 and 2000. At the same time inside corporate executives were selling out everything they had. What is amazing is that our federal government in the form of the Security Exchange Commission never did a thing about it. There was never an blanket case taken or an outcry that almost all of the inside executives had somehow magically sold out of the market six months before the market crashed. Here is the valuable tip I want you to consider in this issue of "The Wallet Doctor": when you are a beginner investor it is important that you DO NOT WATCH THE FINANCIAL NEWS OR READ THE FINANCIAL NEWSPAPERS! Don't let the stock market industry lead you around by the nose like livestock to the slaughter house. Don't listen to what they want you to listen to. You should focus on learning what is important in the stock market and the mass media will only confuse you until you have educated yourself. Also, don't forget that I show you how to focus on what is important to identify stocks that are low priced but unlikely to go lower because the insiders may be buying them up and I show you when to sell when the same insiders are likely dumping the same stocks on the public in my course "The Blue Collar Base Bonanza ? What the insiders [definitely] don't want you to know!" You can get more course information on the course website at www.BaseBonanza.com. Recommended reading: 1. Mahar, M. Bull! A History of the Boom, 1929-1999 (New York, HarperBusiness , 2003) 2. Shiller, R., Irrational Exhuberance, (New York, Broadway Books, 2000) I wish you the great abundance in your life you deserve because of what you are and don't forget that happiness is found only in the precious present moment! About the author: Dr. Scott Brown, Ph.D., the Wallet Doctor, is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by looking out over many years to spot stocks that are low and primed for rise in the new bull market. In 1998 he was shouting out to the world to "get out" of the stock market but now he is shouting to everyone that it is time to "get in!" The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. For more information visit Dr. Brown's site at http://www.BonanzaBase.com or sign up for his investment tips at http://www.WalletDoctor.com
Related News
|
 |
|
|
RELATED ARTICLES
The Demise of Buy & Hold
Based on consistent results I think Buy & Hold should be renamed Buy, Hold & Bye-Bye. It sounded great for a while, especially for the huge majority of investors who don't have the time or interest in really doing due diligence on investments.
Numismatics are for Collectors, Not Investors
As a precious metals investor, you may heard much about numismatic and "semi-numismatic" coins, particularly the St. Gaudens $20 double eagle gold coin. While coin collecting can be an interesting hobby, it is not necessarily related to metals investing. Coins of this type vary in value with the ebb and flow of the collector market and are not strictly tied to metal value. Also, these coins often go for much more over spot price than bullion coins.
Emotions: A Traders Worst Enemy; Get Rid of Fear and Greed - Youll be Glad You Did
You hear it over and over and over in books, forums, and chatrooms. Fear and greed, fear and greed, fear and greed. Emotions are a trader's worst enemy. What are we supposed to do about it? We are human after all. Human beings have emotions. We can't just throw a switch and suddenly behave like "Data" on Star Trek the Next Generation.
How to Invest Overseas - Intelligently!
In recent months, many advisors have talked a lot about the wisdom of investing overseas, but most have failed to really address the way to do that. For new investors, investing in the U.S. is challenging enough, but investing across borders is often even more daunting.
Effective Advice For A New Generation of Investors
CATCHING A FALLING KNIFE
How to Analyze the Veracity of Investment Newsletters
When trying to analyze whether a promotional ad for an investment newsletter or a market timing investment trading system is worthy of investigation, the following questions should be asked:
DXPortfolio: A Great Passive Investment of 25% to $40% per month
First, I need to explain about e-currencies or digital currencies. DXPortfolio are based and supported by the supply and demand of e-currency. Before, I go on to explain how I have used my e-gold account in accordance with my DXPortfolioto grow a nice size nest egg for later (which is growing as we speak), I have to tell you something. As you can guess, the growth of digital currencies are just beginning. That brought me to the idea of DXPortfolio. This is a portfolio based on the ongoing collection of worldwide e-currency exchange fees. Since these fees will only increase, the portfolio will only increase. As you can see it is a win win situation. The only factor that is involved is how fast or slow it will increase. My experience has shown an average gain in my portfolio of between 25% to 40% increase per month. That will account to an increase of over 500% per year. I have been involved for over 6 months and plan on continuing my involvement. I almost forgot the best part. While this DXPortfolioincrease you can borrow the money you invested to use in other areas, and the portfolio still increases the same. Yes, you read it right. You can continue to use the money you invested while it continues to show profit. If you are interested in this kind of opportunity, I will tell you how I am doing it.
Before you begin, you need to open a e-gold account. This is a free account that we will need to fund the DXPortfolio and also get the money back out for use.
Investing for Retirement - Not an All or Nothing Play
In 1519, Hernando Cortes, beached on the shores of unexplored Mexico, made a fateful decision: he would burn the ships he and his men arrived in and attempt to overthrow Montezuma and the mighty Aztec empire. The decision was risky. The Aztecs were meant to possess large numbers of brave warriors while Cortes had only a handful of men. If Cortes had the slightest setback there would be no escape. On the other hand, Cortes had no choice. The powerful Governor of Cuba wanted his head. Cortes had defied the Governor time and time again and his best option for getting out of the situation was to win favor with King Charles by conquering a civilization rich in gold and other treasures. Since Cortes' men might get a little antsy if the going got rough and decide they would prefer going home, Cortes decided it would be best to completely align their incentives with his. He did this by burning the ships. Anything but success would now equal death for Cortes and all of his men. Thus began the famous march from Vera Cruz to Tenochtitlan.
Financial Planners
"Financial planners are like dentists: they may occasionally inflict pain, but in the end, you will be better off for following their advice!"
Success Trading: More Basic Terminology for New Traders
One important aspect of trading the markets is to understand how to feel it's overall pulse. In the stock market, this is measured by measuring the movements of selected stocks across various sectors to let us know how the market is doing in general. A gentleman by the name of Dow came up with this concept and today we still use his Dow Index for the purpose of measuring the market's pulse. There are also several others out there, but another popular index of mostly technical stocks is the NASDAQ.
Investor Guide to Financial Health
Step 1: Spend less than you earn
Quit and Retire Three Years Earlier!
For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are, the closer you probably are to retirement, and the less time you have to do anything ? like save up. Effective 'saving up' requires time. Time so your money can grow. Save an extra $200 a month, three years before retirement (at age 62), and you'll amass a grand total of $7,887 (averaging 6% growth). Not likely to have a big impact on your retirement lifestyle.
Investing & Online Stock & Share Trading: Money & Risk Management - Atkinson Portfolio Planner (1)
This article was originally featured in Daryl Guppy's 'Tutorials in Applied Technical Analysis', voted no 1 trading newsletter in Australia by Shares magazine & no 4 in the world by US Stocks & Commodities magazine and is reprinted here with Daryl's permission.
Scots Beat Yanks in China Bank Deal
With visions of an ATM in every neighborhood in China, foreign banks and investment firms are queuing up to join the "China Club."
Pros & Cons of Investing in Bonds
What are Bonds?
Asset Allocation Lessons: The 70% Inflation Solution
For investors only... and for speculators who need to invest their winnings.
When NOT to Invest
Unfortunately, many investors who are seduced by the lure of easy money try to become "active" investors before they have the skills, the resources, or the appropriate intellectual framework to do so.
Realistic Investing Expectations
Over the long term stocks have provided us with great average return results. But this average return masks a great deal of volatility, because returns have fluctuated within a very wide band.
Help with My Annuity
The cries are heard from the distance, "I need help with my annuities." Nothing has changed...just a lonely senior who can't trust anybody with her annuity because every time she asks for advice, someone tries to make her invest in a different annuity...Sound familiar? Well you are not alone.
High Volatility Investments
Penny stocks and options are high volatility investments that attract both the trader and the long term investor because of the small amount of capital required to make substantial gains as compared with less volatile higher priced stocks. The long term investor buys a stock believing that a company's value will increase over time and the stock price along with it. When he buys an option it is usually to reduce the risk in owning the underlying stock. The short term trader looks at things a little differently. Typically a trader looks for large percentage price movement over a short period of time. Large percentage, short term price movements can be found both in options and certain penny stocks.
|
