Financial media, specifically financial television, tends to get a bad reputation. People refer to it as noise and discuss how financial TV has a tendency to sensationalize things. Personally I don’t feel that this is a fair assessment, rather I think it is important to look at how you are using financial media to influence your own thoughts and beliefs on the market.
Famous investor Byron Wien wrote an article about his ‘rules for life’, one of which was about reading. To summarize his point, he said ‘don’t just mindlessly read’. He went on to explain that we should not simply mindlessly read, but rather should read with intention. The keyword here is ‘intention’. We should read a book already having developed our own assumptions and ideas, and then compare the authors comments with our own take. That is how we will grow as a human being and as an investor.
The same idea is applicable to financial media. It is all in how you are intentionally, or unintentionally, utilizing it.
Here are three positive ways to use financial media:
1. Do your own work first.
Do not use what you are hearing from experts on TV as a replacement for your own analysis. Rather, solidify your own perspective first. Develop your own thoughts and analysis before checking in on what the experts on TV are saying. Become comfortable with your own point of view and starting point, and then compare the take of the experts to your own. You can then see where any similarities and differences are and understand why those differences exist.
2. Do not allow the analysis of financial TV to replace your own analysis.
Instead, allow it to inform your analysis. A lot of times experts will talk about a move, reversal, inflection point, new data point, etc., that I might have missed. There can be different themes or stories that come out of someone else’s analysis that tells a different story than your original analysis. Simply, it tells you what you should be looking at. Revisit those differences so you can better understand a different point of view.
3. Lastly, use financial media to think critically about your own tool kit.
Look at the individuals you respect and see what their process is. What values have they established? How do they look at the world, and whom do they talk to? All of those are tools you can learn from other processes to better improve your own.
RR#6,
Dave
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. Please see the Disclaimer page for full details.