This morning, as we glanced at the front page of our daily newspaper, we got quite a shock. There were SCREAMING HEADLINES -- and we do mean screaming since headline was in enormous, very rarely used type and covered three quarters of top of the front page -- "Slowdown Fears Rock Markets." There was a huge picture of ostensibly frenzied traders, their arms thrust forward holding pens, shouting out orders, clutching order books, "jostling" as the paper said in futures pits "when oil hit $100 barrel for the first time." Of course, to take last things first, commodity traders always look like that. Traders always "jostle" -- that, after all, is how they earn a living. The trading floor is where momentary truth of one kind -- the truth about current price -- is revealed. Unlike the news pressroom, where all too often --though certainly not always -- a combination of the demand for headlines, the need to scare up fear in order to sell newspapers, the perceived imperative of pandering to the crudest of human emotions -- dominates the "news reporting" story. Unfortunately, it often seems to untutored folk like ourselves that what passes for "news" might more accurately be described as "counter-news" or "non-news" or recent history, at best. We have no quarrel with the newspapers trying to stay alive as the ship of newsprint sinks amid the rising tide of quasi-instantaneous, online "news." A whole industry, after all, was built on the invention of "yellow journalism." Sensationalism sold massively in the newspaper business. Anyone who doubts this should visit Hearst Castle and view the half million acres on which the castle sits. The taste is gaudy and, how shall we put this -- tasteless -- but the projection of immense wealth and power is clear. Journalism is a business. It has three primary goals: profits, profits, and profits. Those who contribute to the profit machine in any journalistic enterprise are rewarded; those who fail are fired. This fundamental reality is carefully and relentlessly shrouded behind a veneer of rhetorical claims to represent truth, justice, and the American way. In fact, people seeking to exploit the emotions of the herd cannot -- even if they wished -- serve any larger purpose. For the average investor, this conjuncture of newspapering attributes has serious consequences, all of them negative. Headlines scare people, especially when they are skilfully designed by scare-mongers intent on frightening. The mighty emotion of fear is fuelled easily. Unfortunately, since it is the very level of fear which generally acts as a CONTRARY GUIDE as to when to buy and when to sell, the closer to the bottom and the more compelling the buy point, as determined by historically reliable metrics of both valuation and fear, the more panicky the mass of investors. There are of course beneficiaries of this festival of fear. These are the very small minority of professional investors, those skilled and experienced lay investors who have learned how to contain their emotions and to read AND ACT UPON the CONTRARY SIGNALS coming from the media, and smartly managed money pools -- both domestic and foreign. What could be finer than cheap assets, rendered doubly cheap by a depressed dollar, and then rendered triply cheap by a media-exacerbated orgy of fear among ordinary domestic investors? Nor, it would seem can we seek calm and measured guidance from the apparently knowledgable, rational, cerebral organs of the financial media. This morning, along with the above-cited headline from our local newspaper, the Wall Street Journal, on the front page of its Section entitled "Money and Investing" offered up 5 articles, with titles as follows: Anyone feel like buying stocks? Except, of course, for the immense foreign money pools which are buying American companies with the speed of a rocket. And which are waiting calmly, until the carnage in the American equity market is completed. Oh yeah. People ARE SMART. |
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