FYI: Investors are prone to two opposing but equally debilitating fears: the fear of missing out when times are good, and the fear of loss when markets are volatile. These two fears have a zero-sum relationship with rational decisions. The more you are dominated by these fears, the less rational you are.
So what can we do, as investors, to move toward maximum rationality? Here’s one piece of advice: Turn off the TV.
Regards,
Ted
https://www.advisorperspectives.com/articles/2019/04/01/why-investors-shouldnt-watch-business-tv
Comments
The referenced article is spot-on-target. Here is a terrific quote from the article:
“You are never going to hear from them the words that are the essence of investing: “I don’t know.” Being unable to admit uncertainty is dangerous, because it may cause you to stop thinking about investing in terms of probabilities.”
I suppose I like the article because I try to practice what the author advocates. It’s always easier to like something when it supports our beliefs. It makes us more comfortable with positions that contain a large amount of uncertainty. Over the short term, market performance is problematic. Staying the course is an approach that improves the odds. But, “I don’t know”.
Best Regards
In my former occupation I frequently needed to obtain specialized information from others, and vice versa. When I was asked a question, unless I was absolutely certain of the answer I would give my best guess or estimate, along with a comment to the effect that "I'll give that an (insert percentage here) chance of being correct. If I had no idea, I would simply say so.
Occasionally someone would apologize to me for not knowing an answer- my reply was simply "there's not a darned thing to apologize for... I don't know the answer either or I wouldn't be asking the question".
From the article: "Investors are prone to two opposing but equally debilitating fears: the fear of missing out when times are good, and the fear of loss when markets are volatile. These two fears have a zero-sum relationship with rational decisions. The more you are dominated by these fears, the less rational you are."
>>>This would be a given of human nature, to always prefer the very best outcome.
I've stated this before, and will again; "Know they self." If one doesn't have the emotional personally for investing, hand over the function to a third party.
As to turning off a business tv channel, one must be able to discern what is marketing and what is an attempt; and hopefully accomplished, in providing insight into actions of the market places.
Ultimately to help one think of an aspect they have not considered prior, or to re-evaluate a known/previously learned aspect of investing.
If one is choosing to unplug the tv business channel, for fear of becoming emotionally unstable and then perhaps missing an opportunity here and there to actually learn something, increasing a knowledge base; one has no need to be at this web site either, yes? This would also include all other forms of investment information. Hell, why read another investment theory book or article? What's there to gain?
From a very young age, I worked with and studied mechanical and electrical/electronic mysteries; which lead to a lifetime of employment in various related areas and global locations. I discovered all too often what I didn't yet know and/or an improvement to my decision making habits.
The author, hopefully, is directing his write to those who perhaps should not be their own investment adviser. One would hope he is not expressing that he has nothing more to learn and more so, not from anyone on a tv business channel.
Will I see you again, here?
Respectfully,
Catch
Alright. Than who should watch ?
I’ll say, coming from a very large family where money & money management were pretty much alien concepts (except Fridays when we ate very well), just about everything I learned about the subject of finance came from Rukeyser’s old show on Friday nights - which spanned 25 years. Has shaped my attitudes towards investing for decades.
You could do a lot worse than to invite the likes of John Templeton, Peter Lynch or Henry Kaufman into your living room on Friday nights. Yes - I was a college grad. But being a liberal arts major, left school knowing much more about Robert Frost than about money.
Regards,
Ted
@Ted, Nice to see we agree on something. Thanks.
I’ll agree today’s business news programing is 90% + noise. Vast wasteland for sure. So perhaps that headline @Ted linked should read: “Investors Shouldn’t Consume TV Business Programing Indiscriminately”.
That way you empower the investor to decide what is / is not worth consuming. Not smart enough to make that determination? Than what the hell are they doing managing money in the first place?
Nights are for reading.
Who was the woman who coined it "Investment porn"?
What kills me are the endless tickers running all over the screen. "We do it because we can." And, "If some is good, more is better."
One of my local channels has a ticker running across the bottom during the weather forecast -- supposedly for severe weather. It is really annoying because you can't read the ticker and listen to the forecaster at the same time. Predictably, it has devolved into being there nearly every night now -- every day is a weather crisis.
I complained to them via email, but they don't care. So I switched channels.
Flat screen TVs are just tube TVs where the front of the tube ("screen") is relatively flat:
Your Next TV–Flat Screen vs Flat Panel (2007)
https://pseudosemantics.wordpress.com/2007/03/21/your-next-tv-flat-screen-vs-flat-panel/
Those these days terminology gets recycled, what's old is new, and curved screens are back in vogue:
Consumer Reports (2018): Is a Curved TV Better Than a Flat-Screen TV?
https://www.consumerreports.org/tvs/is-a-curved-tv-better-than-a-flat-screen-tv/
Can't wait for the real chip version; being the "optic nerve" feed.
Coming to a town near you, soon enough.
But between the leading finporn channels - CNBC, FBN, and Bloomberg - I prefer Bloomberg any day of the week, as it tends to be far less sensational, 'quiet' and fact/data-driven than the other two. CNBC can become a screamfest with 8 commentators on the screen at the same time. When it comes to financial news on TV and radio, I like it nice and boring ... not too many annoying sound effects, visual effects, or screaming.
Not to mention, Bloomberg really treated me right (ie, respectfully in all ways) when I did truly interactive/well-paced interviews. With CNBC I felt like I was on the conveyor belt and brought on just as a two-sentence prop to fill the other side of the screen from their 'popular' pundit of the time. I'd still think long and hard before doing another one with them.
But when I trade futures I still like having the CME squawk going in the background just as noise. Voice inflections from floor observers, once you get to know them and their style, can be helpful .... not to mention funny. But for me it's just background noise mainly.