As New Jobless Claims Fall. Or Market Surges On Positive Comments From Buffett, Gates. Or even—for such is the depth of its cynicism—Market Surges As Dollar Snaps Losing Streak. You see, on a day when the market goes down, there is only one causality of which anyone can really be sure: that there were more sellers than buyers for whatever complex of global reasons on that particular day. (The converse is equally true on a day when the market rises.) So, on November 12th, weak oil demand may indeed have been a reason some institutions were net sellers. The optimistic comments of Buffett and Gates, falling jobless claims and Wal-Mart earnings may have been reasons that some were net buyers. We can’t know, and it doesn’t matter. All we can say for sure is that, on this particular meaningless day (for any one day is always meaningless), the sellers outnumbered the buyers.
This is the pure, unvarnished truth. Which is exactly why financial journalism can’t report it. Journalism isn’t in the truth business; it’s in the news business. And those are two entirely different things. The essential nature of truth is that it’s unchanged from day to day. But the twenty-third time that journalism repeated an unchanging truth—in this example, that the market went up or down because there was a surplus of sellers or buyers on that particular day—you would absorb that truth, and you’d stop needing to consume financial journalism. And this, above all else, is what journalism cannot allow to happen. So it will say anything: it will infer, and sell you, whatever illusory causality it chooses to make up that morning in order to create a market “news” narrative. The ultimate goal of financial journalism isn’t to help you become financially secure and independent. (It doesn’t know you, and cares even less.) It is to get you to buy more financial journalism. This is another critical distinction, and one which most investors miss, to their sorrow.
Financial independence is built over a lifetime by following a few simple rules—there probably can’t be more than about a couple of dozen of them. (Just to name five: thrift , regular investment, long-term perspective, focusing on your goals rather than on the markets and not getting scared out of equities.) Again, the constant reiteration of these truths would be suicidal for financial journalism, as they would inevitably lead you eventually to stop consulting it altogether. So it will headline, “Is this rally for real?” and try to get you to listen to (or read) four talking heads, two on either side of the question, then cut to a commercial. Aft er which it will headline, “Is it too late to jump into gold?” and come back with four more talking heads. For you see, journalism’s objectives aren’t just different from yours. They’re antithetical to yours. You need to think, plan and invest long-term. Journalism wants to keep your focus as short-term as is humanly possible—ideally, minute-to-minute—so you won’t dare turn off that television. You need to line up your savings and investing program with your most cherished lifetime (and even transgenerational) financial goals. Journalism wants you trading, chasing hot trends, and jumping in and out of the markets, so you won’t dare turn off that television. You need to maintain your basic, fundamental and above all American long-term optimism—which is just another word for realism—or else you’re in danger of getting scared out of the market. Journalism wants you petrified—of double digit unemployment, the “jobless recovery,” inflation, deflation, swine flu, or whatever apocalypse du jour they’re selling today … so you won’t dare to turn off that television. Turn off that television. Because financial journalism just isn’t your friend. If you’re really looking for a friend, go have a quiet cup of coffee with your financial advisor.
© 2009 Nick Murray. All rights reserved. Reprinted by permission.
