Wednesday, July 29, 2009

Business News Blather

I used to watch the TV for business news. But now Kudlow’s and Cramer’s shouting leave even more ringing in my ears than the express trains zooming past the local subway stop at 86th Street. I have read the Wall Street Journal for decades, but I have noticed that after Murdoch took over more news stories have political slants and headlines are unnecessarily more pessimistic in the age of Obama.

I don’t get the parade of blond people at Fox News. Are they really trying to be that obvious about who is in their camp and who they could care less about? The CNN anchors who read Twitter responses: are they serious about that? That isn’t democracy, but stupidity, on display for the world to see.

I have become a full-fledged media skeptic. I do think that many of the quick and easy responses encouraged by modern media are often nothing more than rants. That’s one of the reasons I have not allowed comments on Chico Lingo. I read other blogs for years, and still do, and the comments are rarely thoughtful or interesting. I figured if someone wanted to comment on what I wrote they could send me an email, and I have received dozens. Or they could start their own blog.

I know I am in the minority, in more ways than one, on turning away from the flotsam of the news cycle. My only use for democracy-as-hyper-mediocrity is that I try to take advantage of the paranoia or euphoria through my investments. I ignored the doomsday scenarios of March, and kept my investments exactly the way they were. So I have benefited from the recent run-up in stocks. New money I have added to my short-term bond portfolio, simply to have more emergency reserves in case we return to the brink of depression. I am also paying off debt in advance, even if my debt levels were relatively small compared to my net assets.

I watch the crazy flamingos of speculation, the fast money, the lightning rounds, and I am happy to be patient and contrarian and independent. Investors should do their homework, and this knowledge will allow them to ignore the garbage advice that washes up on their shores.

One of the reasons, as I pointed out to my wife Laura, that I did not panic after the recent vicious bear market was that my mutual fund and individual stock positions were still mostly in the black, or with slight losses, at the bottom of the precipitous drop. I have invested patient money, for decades in some cases, and so a downturn cuts into my gains, but isn’t deep enough to even put me in the red.

Too often I hear of friends who invest to get rich quick. To me, that’s not investing, but speculating. I even had a close friend who would invest for a major appliance, for a month or two, score a quick profit, and buy the refrigerator he needed. It was ridiculous to me then, and is ridiculous to me now. But most media outlets encourage this kind of behavior. In yesterday’s Wall Street Journal, oil traders who invest in oil futures for quick bucks were labeled “investors” in paragraph after paragraph. That’s editorializing in news stories, and makes the point against Obama that he is against “investors” in this market when he or his administration considers putting limits on oil traders.

I don’t think we should expect much from CNBC, the Wall Street Journal or Fox Business News in terms of investigative journalism. They are promoters of Wall Street, and sometimes that’s good and too often it’s horrible. The best single article I have read about the current shenanigans in the finance industry came from the New York Times, about how subprime brokers have resurfaced as dubious loan fixers, by Peter Goodman.

The individual investor has to protect himself. But ‘Caveat Emptor’ only works if there is full disclosure in plain English, if abusive behavior is eliminated and illegal behavior prosecuted, if you are not lied to by whoever is selling you stock in a company, a bond, or a mortgage. That’s the proper role of government and what George W. Bush could never understand.