We live in a time where gaining access to information has never been easier. Accessing data on a stock takes seconds, and we are constantly bombarded with news and information about market movements, investment ideas or political developments.
In my view, none of this information is helpful. Sure, it always pays to be up to date on world events and broaden your horizons by reading. A constant barrage of market intelligence, however, is not helpful and is more likely to push you to make irrational decisions than sensible investment choices.
The problem of the media’s influence on investment decisions is something investors have had to deal with for decades.
The world’s greatest investors have succeeded in tuning out this barrage of information and concentrating only on what is important to them. Being able to tune out the noise and focus only on what is important is not a precise art. Rather, this skill is built with experience. To help give you some idea as to how to create your own media-blocking defense, I have gathered some insights from leading investors who already understand the detrimental impact of media saturation. Hopefully you will be able to take something positive away from the advice.
The media: how to deal with it
"One of my greatest complaints about forecasters is that they seem to ignore their own records. The amazing thing to me is that these people will go on making predictions with a straight face, and the media will continue to carry them." -Howard Marks (Trades, Portfolio)
"When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle's scathing comment: 'You don't know how easy this game is until you get into that broadcasting booth.'" -Warren Buffett (Trades, Portfolio)
"Whenever something is really pounded or when something is skyrocketing and it is on the front page of the New York Times, no matter how much you agree with it in the long term, you have to reverse yourself for a while. The dollar, for instance, was on the front page of the New York Times three or four time recently. I am terribly bearish on the dollar, as you have heard, but I have enough sense to know that when it is in thepopular press, I should not be selling dollars." -Jim Rogers
“Markets often do things that defy logical explanation – but people keep explaining them anyway. Why don’t we ever hear, 'The market rose today, but no one knows why?'” -Marks
“The idea that people affiliated with Wall Street know something. My mother is a classic example. She watches 'Wall Street Week' and she takes everything they say with almost a religious fervour. I would bet that you could probably fade ‘Wall Street Week.’” -Paul Tudor Jones (Trades, Portfolio)
"Financial crisis are like thunderstorms - you hear stomach-jolting thunder after lightening has struck; rarely do the media and masses telegraph financial catastrophes in advance." -Allan Mecham
“The rest of the print and TV business press are notorious pilers on. A classic case was during 1979 and 1981 as oil prices and inflation surged. Numerous books were published by experts forecasting hyperinflation, depression and a collapse of the dollar. At one point, seven of the top 10 books on the best-seller list were about inflation and how to survive it. Even wise investors like John Templeton gave speeches saying 7% to 8% inflation was inevitable. Of course, decades of disinflation, not inflation, were about to occur, during which both stocks and bonds would soar.” -Barton Biggs
"Media outlets are quick to present us with one crisis after another, along with constant economic and political worries. With the help of the internet and many television stations, bad news circles the planet in no time. With the right twist, plain old bad news begins to look more and more like an imminent catastrophe and for many investors, the perfect reason to sell their stocks! Good news, on the other hand, remains largely unnoticed since it seems to represent a less valuable source for ratings and clicks." -Francois Rochon
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