Popular and Critical Acclaim
Over at The Big Picture Barry Ritholtz has some great suggestions about improving financial television. We agree with the entire list, but especially like the following:
5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.
6. Separate the Signal from the Noise.
Understand that most of the day-to-day action is simply noise. Look at
a long term chart, you can barely see 9187 or 9/11. If those major
events get lost in the long term trend, what does the intraday jags,
kinks and reversals mean? Very little. Recognize that not every data
release, slice of news, or rumor is at all significant. Stop treating
them as if they were.
7. Fact Check: An
awful lot of things on air get stated with authority and confidence.
Much of them are little more than junk or pop myths. Why is it that the
more dubious a proposition is, the greater the confidence the speaker
seems to muster? Consider fact checking as much of the statements that
are made on air as possible, and making frequent corrections.
9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week
— Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful
and accessible. Quiet, contemplative, discussions, with intelligent
market participants, revealing helpful information. The investing
public would appreciate something of that sort — again.
There is a reason for the current TV programming: Ratings!
The experts know what sells. Everyone on TV is asked to state an aggressive and controversial opinion. It is entertainment.
Would the current investing world give a high rating to Uncle Lou, no matter what the quality of the program?
Popular versus Critical Acclaim
We recently watched an old film for which a reviewer had noted that it achieved both popular and critical acclaim.
That is certainly great news for a movie, and one can easily see the distinction. At nearly any time one can find a very popular movie (the "date movie" from back in the day) that has little artistic merit. At the same time, there is something playing at the local Art Theater that scores high on artistic merit, but does not attract many teenagers.
It is a delight when a film can satisfy both criteria. It is also a great challenge.
The Investment Audience
Here are a couple of key facts about the audience for investment news:
- Individual investors have dropped out. (We'll get them back after another 25% or so in the major averages).
- Most readers are obsessed with the negative. That is how to seem smart at a cocktail party.
- One can measure this with objective indicators, like our Seeking Alpha sentiment indicator.
The reader will note that we are moving beyond financial television, and considering all sorts of information.
With newspaper ad revenues disappearing, MSM are all turning to blogs. Blog revenue is all about hit count.
If times were more prosperous, business managers could afford to think about the actual merits of analysis. In times of stress, they look for the most popular.
So what happens? We all know from behavioral finance that investors chase what worked most recently. Today, that means that all of the doom-and-gloom predictors are geniuses. Many of those writing and appearing on TV search relentlessly to find the most negative spin on any piece of information.
It is those people who are now featured. It is not because of editorial bias on the merits. It is financially driven. These are the writers who are "popular."
This is what happens editors become pollsters.