Posted September 21, 2020
By Alan Knuckman
How to Tune Out the Crash Callers
All the financial networks are the same
You have the never-ending ticker scrolling across the bottom of the screen while the pundits scream at each other. But they never seem to offer any specific ideas on how to profit from what theyre yelling about.
Heres the truth: the mission of financial television isntto help you make money.
For most, the financial networks are simply a distraction from the discipline needed to be successful.
Infotainment on CNBC, Bloomberg, and Fox Business is big business as the major players raise the emotion to epic levels on even mundane market developments.
Think about it when was the last time a TV contributor or guest told you what, when, and at what price to buy or sell?
Instead, all we see are breaking news alerts to keep viewers engaged and fearful that they will miss crucial developments. It makes sense. After all, the network needs your eyes glued to their advertisements in order to pay their bills regardless of whats happening in the markets.
Newsis oftennoiseas it is more times than not factored into price. Unless the information is different than expectations, the impact on markets is minimal. But the networks will continue to build up every report as a cant-miss event. Meanwhile, the talking heads talk their book or opine about ideology. Of course, those positions and politics should have little impact on any individual investment decision.
Then there are the incessant crash callers and their daily predictions of a market meltdown. Like guessing dates and places of earthquakes, calling market breakdowns is an equally inexact science. Yet this crash chatter always attracts unfounded attention no matter how long the pundits have been dead wrong.
The solution?Turn off the TV!
The strength to tune out the financial network noise is often a function of confidence. An investor with a plan is not subject to the bulls, bears, dreamers or believers that are on our airways.
Discipline is key, and the ability to block out the never-ending nonsense and noise from the magic picture box.
Keep it In the Money,
Alan KnuckmanEditor, In-The-Money
Trading Tip of the Day: Its nothing new
As the great trader Jesse Livermore once said, Nothing new ever occurs in the business of speculating or investing in securities and commodities.
Your worries are the same as the worries folks had 10, 20 and even 100 years ago. Its been more than a century since the last flu scare of this magnitude but your great-grandparents were dealing a very similar situation (they just couldnt complain about it on Facebook).
Now the markets have dragged the herd off the March lows kicking and screaming despite the gloomy economic outlook. Its difficult to rationalize. But that doesnt mean we wont see higher prices in the days and weeks ahead.
Sure, the players change. But the game remains the same. The stock market is a pit of human emotion on steroids. Fear and greed will dominate markets whether its a group of real traders or dueling high-frequency algorithms.
-- Greg Guenthner