Last week the The East Valley Tribune (Phoenix Suburbs) found it necessary to post as the top story of the day when the Dow dropped 122 points. As I read the paper in the morning in Tempe, AZ the NYSE had been open for 3 hours already and the market was already on a major rebound and to gain more then it had lost.
Fox News business headlines for Monday 05/02/05;-Oil Prices Fall Below $50-Manufacturing Activity, Hiring Slow in April-Construction Spending Hits Record High-Tyson Profit Falls on Trade Bans, Mad Cow-Morgan Stanley Board Backs CEO; Sharles Fall-Fed Expected to Raise Rates by Quarter-Point-Humana Profit Surges on Medicare Members-Avon Profit Up but Outlook Disappoints-Chevron Texaco Profit Surges-Archer Daniels Midland Profit Disappoints-Proctor & Gamble Profits Up, Outlook Hiked.
The bottom line here is no need to get ourselves in an uproar. For most of us, making investment decisions based on day to day headlines from any media outlet is silly. Newspapers and news services are not economists, they do not understand trends, they are journalists. They may interview economists or trend researchers however, in the interview the journalists may lack understanding of macroeconomics. They see one company faltering or one sector of the economy surging and it is an instant story, headline news.
I watch financial shows occasionally. Neil Cavuto from Fox News seems to have the ability to get the brightest and best in market experts. Commonly he may have 3-4 guests from the top brass of financial institutions. As often as not, all the guests will have conflicting viewpoints. They will each have plausible and believable arguments why the economy is preparing for a surge, preparing for a bust or preparing moderate growth (I think these experts like to say "lackluster"). While I enjoy the Cavuto, "Your World" and I do seem to learn each time I watch, I typically leave the show with more questions then answers.
I am not sure what one should take from this post.... For answers to investment or the market, "When in doubt, turn off the news."
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment