Financial Media – Does the Financial Media Have a Hidden Agenda?

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I’ve recently written about why investors should be leery of the information they get from Wall Street and the government (see Don’t Buy Into Wall Street’s Bull … and How the Government Tricks Investors Into Buying Stocks). Today, I’d like to discuss two other sources: the media and independent analysts.

Now, I am not insinuating that any of these parties are outright lying about information — well, except for Wall Street on occasion — but that the information contains flexible truths that can be molded into whatever the desired message is.

When it comes to independent analysts, you shouldn’t rely on the headlines of their stories as the sole source of your information. Instead, you need to uncover the full story. And the only way to do that is to drill down past the skew to get to the real information.

Remember, the analysts writing these stories have their own agenda that may or may not be in the investor’s best interest. Most of their stories have more than one angle to them. Depending on the source, information can be skewed in one direction or another. That leads the investor down a selected road that often fits the agenda of the news source, but does not always fit the best interest of the investor.

Another source of information that seems to have an agenda is the media.

Sunny Side Up

Every time the market looks or trades up, you’ll hear that the market is looking good. Up is described as positive and is treated with smiles and laughs. Any news that can be read in more than one way is always covered from the positive side.

As far as the market trading down, the opposite is true. Things are described as bad and are negative if the market trades down. The negative side of a story is infrequently mentioned and, if it is, it’s played down.

Whatever happened to unbiased reporting? Whatever happened to reporting the facts as they are, and allowing the viewer to decide which way a story or situation should lean?

It seems that the media tends to skew things to the upside or positive side instead of reporting on the realistic side.

Bulls are cheered and happily greeted for giving us the optimistic outlook regardless of whether their view is realistic. Bears are booed and treated as doomsayers and doubters, regardless of the logic of their view and opinion. With very few exceptions, everyone in the financial media seems to want the news to be good and the market to go up.

We know that everyone wants the market to go up, but why would a news seemingly ignore the news industry’s goal of unbiased reporting?

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The Ratings Game

Until very recently, people seem to pay more attention and be more interested in the market when it goes up.

Think about it. When the market is trading up, how excited are you to get home and read your 401(k) statement? If you’re at a party, how often does the topic of the market come up? Everyone wants to tell you how well they are doing, what they are into, and who they have their money with. Plus, with the rate at which the market is trading up, everyone begins counting how many millions they’ll retire with and how soon it will happen!

Meanwhile, during periods of time when the market is going down, sentiment shifts to gloom and doom. 

How many times have you been standing in the break room at work and heard one of your co-workers say that they don’t look at their 401(k) statement anymore? How many times have you heard them say they are just going to keep putting money into their 401(k) and look at it later? How often do you hear someone say that in the market’s current situation, they’ll never get to retire? And how quickly does the topic change?

The networks are very familiar with your answers to my previous questions. They know that their ratings depend on your interest in the market. If you are very interested in the market, which is much more likely to be the case when the market is going up, their ratings are high as you are probably tuning in.

In the times where the market is trading down and your interest is waning, you are probably not going to tune in, so their ratings go down. That is the simple fact. So the media are going to bend and lean toward the optimistic side of the stories and situations for the sake of their ratings.

The Truth is Out There

Now let’s not get crazy here. I am not saying that in every case the media purposely ignores the facts and makes everything sound good even if it’s actually bad.

I am simply saying that there is a tendency to take a story and lean it to the bullish side more often than not due to their agenda to get higher ratings.

Again, the right information, the real information, is out there. You can find it and the media can provide it.

But you must be able to filter out the slant of the story to get to the real, unbiased, usable information. What you need as an investor in terms of facts and figures is out there, you just need to know how to find it and know the lean and agenda of those giving it to you. 

Tell us what you think here.

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