Unless you live under a rock, you have heard the phrase “fake news” quite a bit, mostly from our President. I always strive to leave my political views out of Investucate, mostly because that is not what Investucate is for. I do not intend to start now, but this concept of fake news, does affect us as investors and you need to be aware that not all information is good.
I wrote a blog a few weeks ago called “Who to Follow” where I pointed out that advice differs from guru to guru… and sometimes quite a bit!
For example, Dave Ramsey says to avoid debt, but Robert Kiyosaki says to use debt to become rich. Who’s right? Well, I will leave that one for you to decide because it really is a personal choice on who you want to follow. Since people vary in experience, risk tolerance, education, and values, the truth is there usually isn’t a one size fits all best approach.
For this blog post I don’t want to focus on choosing which teacher you should listen to, but rather what information you choose to listen to. The information and news can vary even in the financial world. We expect it to vary in regards to politics, after-all there are some polarizing views out there and it depends upon which end of the spectrum you are on. In the financial world it can vary as well or just sometimes be wrong collectively.
If you’ve been following me or listening to my podcast, Bulls, Bears, and BS, you know that I am a fan of Phil Town. Back in 2007 Phil Town went on CNBC and did battle with those folks over whether people should get out of the market or not. He caught some grief from the host, Maria Bartiromo, but ultimately he was right as the market crashed in 2009.
I’m not being harsh towards Ms. Bartiromo, she was certainly not the only financial journalist who thought people should stay in the market at the time, but it goes to prove that you have to take what financial journalists say with a grain of salt and look at facts.
I love CNBC and I often have it playing in the background. That doesn’t mean that I believe everything I hear on there. Nor do I believe everything I read in the Wall Street Journal, Barrons, Forbes, etc. You have to think for yourself.
My suggestion is to read a lot of articles from multiple sources and get a balanced dose of information. When it comes to news on particular companies, you will often read biased reports after a company’s conference call. When that happens you should read the transcript of the call for yourself and make a decision based upon facts, not what some financial journalist’s opinion is.
In short, learn to listen to multiple sources but ultimately think for yourself.