"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey
When you have a financial TV commentator who is very gifted in reading off a teleprompter, you begin to believe what they are telling you is fact. It is opinion, not fact.
At least by reading the WSJ and Barron's, you can sit back and hash out what you read, and come to a reasonable conclusion. I do it all the time. I am not saying that one is providing you with better information than another. What I am saying is when someone is reading off a teleprompter, and you are looking them square in the eye, you have a tendency to think what they are telling you is true.
In the real world, when you talk to someone face to face, you can look them in the eye and judge whether the person is full of crap. You can't do this when watching TV.
For example, I have seen many ads/ infomercials, etc that lead you to believe that their products or services will do these remarkable things. After you get sucked into buying them, you realize you were screwed.
So, here's the question. How did you get fooled?
That's easy. You saw it on TV, and the person trying to sell you the worthless product was not looking you directly in the eye. And, believe it or not, many people believe if something is on TV, it must be true. Believe me, often what you see and hear coming from your TV set is not the truth.
This being said, you need to understand that some of the opinions you are hearing from guests on the financial channels, and some of the news provided to their commentators may not be true.
In the book, "Wall Street Meat" written by a former analyst for Morgan Stanley, Andy Kessler, Kessler said that the big Wall Street firms have the ability to manipulate the media, and got them to report whatever they wanted to manipulate stocks they wanted investors to buy.
As the Dow Jones was hitting the14,000 level, the financial media was using catch phrases to get you to buy stocks at the high.
Here's CNBC's Erin Burnett saying "Move over Goldilocks- We have economic nirvana."- on January 31, 2007, and Jim Cramer telling you to buy even though the market is way overvalued.
Tell me Erin Burnett isn't a gifted reader. On January 23 2008, as she was reading off the teleprompter, one of the writers wrote something that Erin didn't intend to say;
She reported that Apple shares were down, and noted;
"It was the It Stock of '07, and it is apparently the s--t stock of 2008."
At one time, I had the video link on my website. But, CNBC must have had the evidence destroyed. It is nowhere to be found. Sorry about the long dissertation, but I hope you understand my point. Yesterday, the market rebounded on the merger news of Pulte Homes agreeing to buy Centex. Also, retailer Bed Bath & Beyond and restaurant chain Ruby Tuesday rose sharply after earnings at each company easily beat estimates. The retail news shows that consumers are not dead, and the Wall Street gloom machine was way too bearish. Investors chose to focus on the optimism instead. Oh, but the Ruby Tuesday (RT) insiders knew what was going on. Look at these recent insider buys; Ruby Tuesday Insider Purchases You may be thinking; this can't be legal! Yeah, right. Not legal for you and me. Today, Wells Fargo (WFC) said they are making money, and will handily beat Wall Street gloom machines first quarter estimates. The financials are up big today. The Commerce Department reported that wholesale inventories, showed a bigger-than-expected drop of 1.5% in February. Economists had expected a decline of 0.7%. These inventories will eventually get worked off as consumer sentiment improves. Once investors 201k plans begin to look more like the 401k's they had a few years ago, spending will drive inventories back to normal levels. Have a wonderful Easter weekend.
