The Problem with Financial Journalists

I knew a chap at uni who later went on to become a financial journalist. We did not exactly get along well. Probably at least partly, if not mostly, my fault. But not entirely.

When he got his own byline in the business pages of one or other of the Fairfax papers, I remember reading a brief article by him which said something really informative and value adding along the lines of ‘financial markets were very bullish yesterday‘. It was so long ago that it was before I knew what ‘bullish’ meant in that context. I could imagine him in his nasally tone saying out that loud whilst squinting with his beady eyes. (Yes, I am sometimes a mean person.)

But right now, when the stock market is going up and down like a yo-yo, you have to wonder what all the financial journalists and analysts are really saying, and what they mean, and whether you can really make informed decisions based on what they write.

I have been paying fairly close attention to the Bloomberg app in particular the past five weeks, and the headline story on the app right now is ‘Jim Rogers Expects “Worst Bear Market in My Lifetime” in Coming Years’. The dot points under that say that another rout is ‘imminent’ because of economic damage and high debt, and that this Rogers chap (I have never heard of him before) has lots of cash and has bought shares in China and Russia.

What it says in the article I do not know – I have used up my free articles for this month and don’t want to pay for reading more.

Last night, the big story on the Bloomberg app was that analysts in JP Morgan thought that the worst of the bear market was over. I tempered the FOMO that triggered in me by reading something in the ABC website (ie the Australian Broadcasting Corporation) calling the recent rise in share prices a ‘classic bear trap’.

Which leaves you wondering what to believe. Is the worst over, or are we still very early in a lengthy bear market. You can easily find someone to give you either answer.

Perhaps, the most accurate answer, to quote the early 1990s band Frente! (I do have quaint taste in music) is Yes, No, Maybe.

A friend of mine put it best when we were chatting about stocks and the market today when he said that ‘if financial journalists were so bright, why were they hammering away on a keyboard instead of living in the Bahamas with their feet in a bucket of champagne’?

Exactly. And I have only heard of two financial journalists who seem to have gotten on in business – one is Heather Killen (daughter of Sir Jim) and the other is the late Christopher Skase. Ms Killen seems to have done alright, in a low key fashion. Mr Skase on the other hand, earned a very sympathetic obituary from his former colleagues at the Financial Review, who claimed, very charitably, that his ventures had not actually hurt any real people, and that Palm Cove had been a great development which had added benefit to the tourism industry.

The first company I ever bought shares in, some 24 years ago, was Mayne Nickless, who were in the process of divesting themselves of their quarter of Optus. As a newcomer to share investing, I bought $1000 worth of shares in Mayne and followed them avidly, the way that a new convert to AFL follows his new team.

I suddenly started reading the Financial Review several times a week and buying each month one or other of the print sharemarket magazines that had then become popular (remember, this was 5 years after the Commonwealth Bank float and the year before Telstra 1, so every man and his dog suddenly owned shares).

I remember one magazine having, in the one issue, a technical analysis which was pessimistic about Mayne Nickless long term, and, separately, a write up which was very ‘bullish’ about Mayne. In other words, contradictory accounts in the one magazine.

It reminds me of an edition of Nexus Magazine (my favourite conspiracy theory rag) from around that time. In that issue, it ran a story which conclusively proved the moon landings were fake, and on the following page another article which proved just as convincingly that we did land on the moon, but we were warned by the UFOs waiting there not to return.

Published by Ernest Zanatta

Narrow minded Italian Catholic Conservative Peasant from Footscray.

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