The Stock Market and the Media: Turn It on, But Tune It Out

by Dick Davis

The Stock Market And The Media: Turn It On, But Tune It Out Splash image

Investors are faced with a daily barrage of business news. There's keen competition over who can break the story first. The clear inference is that the news matters—that keeping abreast of the news, especially as it relates to one’s holdings, is one of the keys to investment success.

I disagree.  I believe one of the worst things that can happen to a long-term investor is to be instantly and totally informed about his stock. In most cases, spot news fades into irrelevance over time.

What’s relevant is what the market decides to do. The news follows the market, not the other way around.

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Dick Davis is a retired radio and TV broadcaster, syndicated columnist and founder of The Dick Davis Digest investment newsletter. He is the author of “The Dick Davis Dividend.” For further information about his book go to .


Arthur from Florida posted over 2 years ago:

The author is correct. In addition, the news media analyzing data regarding stocks is 99% focused upon short-term likely moves, unable to take a separate look at long-term factors that should be of most interest to long-term investors - like $1.4 Quadrillion derivatives, 150 to 289 Trillion dollars of US 30-year debt, the likely decrease in value of US dollar, death of the Euro, likelihood of worldwide economic collapse, etc. Media analysis is aimed at day traders. Long-term negative issues are hustled off stage ASAP, as sponsors would be adversely impacted, and media people are unable to come to grips with implications of known large scale negative future issues, and don't know what to say.

Kathleen from Pennsylvania posted over 2 years ago:

Read Dick Davis's book sited above. When you are finished, read it again.

Gerry from Maine posted over 2 years ago:

I agree that the daily market commentary is as this article says - as they have to say something they tie it to recent events which really have nothing to do with the markets movements.

Dennis from Michigan posted over 2 years ago:

Yes, read the book mentioned above. He does advocate holding 80% index funds and the remaining 20% is self managed funds etc. Looking at the survey of AAII members on index funds, a high majority of members do not hold much in index funds if any at all.

Joshua from Hawaii posted over 2 years ago:

I am disappointed that Mr. Davis uses one bad PBS incident to make his point. He should have used the many CNBC shows which have misled investors with hundreds, if not thousands, of flawed "advice". And I am not only talking about the guy who wants to "educate and entertain you", Jim Cramer.

Arther from New York posted over 2 years ago:

Having been in the industry long enough to gain some insight into why the market acts as it does (irrationally, in the short term), I agree wholeheartedly with Mr. Davis. It used to be a daily game in my office to try to guess what the in-house "expert" in market movements would say on the evening news. He had to say something, because "No-one knows!" just doesn't work in radio or TV. And it's something you definitely don't want your clients to hear you saying.

Douglas from Oklahoma posted over 2 years ago:

Couldn't agree more with the author. I think you can make the case that ALL media including the news media operates just as the financial media.

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