Don't Watch CNBC 61 comments
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Jim Cramer was craven and highly apologetic on the Daily Show last night because he had no choice; he started off by throwing Rick Santelli under a bus, and almost never attempted to defend himself, preferring to go the mea culpa route. This is not new. Even at the top of the market, in May 2007, he was writing this:
Mad Money has spawned legions of haters, people who write about the show and my character in really negative, sometimes pretty nasty ways. These people accuse me of being a clown or an idiot. Usually, I agree with them. When people ask for my autograph, I instantly hate myself.
So well done to Jon Stewart for not letting Cramer's passivity prevent him from saying what he had to say:
It's a long segment (and the one above is just part of the whole interview) so I'll let Chris Rovzar sum up:
"I understand you want to make finance entertaining, but it's not a fucking game," Stewart railed. "When I watch that, I can't tell you how angry that makes me. What it says to me is that you all know. You all know what's going on. You can draw a straight line from those shenanigans to the stuff that was going on at Bear Stearns and AIG and all this derivative market stuff that is this weird Wall Street side bet." Cramer admitted to many mistakes (and even promised Stewart he would change his show), and pledged that his own "goal should always be to try to expose that there is no easy money." "But there are literally shows called Fast Money!" Stewart shot back. "There's a market for that," Cramer tried to explain, but was interrupted by the Daily Show host. "There's also a market for cocaine and hookers!"
In a sense, it's a shame that Stewart had on his show the most self-loathing of all the CNBC personalities -- but then again he, too, had little choice, since Santelli cancelled on him. But the lesson of this interview is that when CNBC is pressed on the way in which it has hurt America, its response is to capitulate and say "well I guess that's true". Which means that the bigger lesson is simpler still: don't watch CNBC. Doing so will do you no good at all, and will quite possibly do you a lot of harm.
Incidentally, Barry Ritholtz, a frequent CNBC talking-head himself, tries to mount the defense that Cramer couldn't by saying that the network has "a plethora of economic voices and market perspectives". Plethora is one way of putting it; cacophony is another. And is in fact the word which is used by the outgoing head of news at CNBC.
CNBC is a cable channel where the closer you get to it, the more unpleasant it seems. I'm a former denizen of the decabox myself, and I can tell you that no good can come from that thing. Don't watch it.
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This article has 61 comments:
On Mar 13 10:57 AM Speedspirit wrote:
> I believe to become an intelligent investor or speculator one must
> know what ideas are influencing the crowd. It doesnt mean that one
> has to agree with anything being said on CNBC or Fox but if the masses
> are being influenced in one direction then a well informed member
> of say seeking alpha will trade in a diffrent direction.Thats how
> it works, no.
CNBC is a cheerleader for positive market moves, but they offer nothing in the way of thoughtful analysis of market events. When stocks fall they resort to shallow finger-pointing, with a different rationale each day, or hour, lacking professional perspective or reliable time sense for the investor.
Worse, CNBC acts as a complicit mouthpiece when they "interview" CEOs and other time-fillers, and they thrive on nearly continuous bashing of our government or groups that don't subscribe to their narrow political ideology.
The abject failure of CNBC to provide legitimate news on behalf of investors limits its value to entertainment and ultra-right political commentary for market watchers.
By welcome contrast, comedian Stewart & staff, who unlike CNBC actually do some research, put a fine point on public ridicule of those who fully deserve it. For a comedy / satire show they pack in a tremendous amount of news that "legitimate" news outlets won't touch. -- R
Geez, when did Jon Stewart become such a moralist?! What BS...
The fact is, we all like the casino, just make it so everyone knows the rules (IMHO).
The value of CNBC is that they get to ask questions to (and you get to hear the answers of) some pretty important people and frequently enough too. Also, did I mention that they are available on SAT radio too? Show me any other real-time news media outlet that compares.
Also, Jimbo is just an entertainer. For Goodness sake, since when we require entertainment to be objective or actionable?
Has anyone see the gag-worthy Carl Quintanilla interview with Allen Stanford from a couple of years ago where a visibly giddy Quintanilla gushed over how "cool" it must be to be a billionaire? It should be the poster child Public Service Announcement for everything that is wrong with Wall Street and the financial media.
www.youtube.com/watch?...
It's just sickening. The perpetuation of lies and disinformation is disgusting and CNBC is the at the heart as this clip so eloquently shows.
Nik
Would it be better to have more "journalism"? Yes. Would it be better to have substantive discussions with guests beyond 20 second sound-bites? Yes. Would it be better to have actual finance academics talking about what the market is doing with regard to implied risk, the market risk premium, fama-french factors, etc.? Yes.
The sad truth is that there is no market for that type of information on a cable network and ad spending would dry up.
Cramer is an entertainer, and has never pretended to be something else. He frequently says that investors have to do work to make investments and not to listen to him. He is a cheerleader for people getting interested in the market.
Invest in low cost Index ETFs. (30% US Stocks, 25% Foreign Stocks, 30% Bonds, 15% REITS/Commodities)
> Has anyone see the gag-worthy Carl Quintanilla interview with Allen
> Stanford from a couple of years ago where a visibly giddy Quintanilla
> gushed over how "cool" it must be to be a billionaire? It should
> be the poster child Public Service Announcement for everything that
> is wrong with Wall Street and the financial media.
>
> www.youtube.com/watch?...
>
> It's just sickening. The perpetuation of lies and disinformation
> is disgusting and CNBC is the at the heart as this clip so eloquently
> shows.
>
> Nik
And I gather that Quintanilla is a long-time zionist. I couldn't believe it when, apropos of nothing, he produced what looked like a hand-drawn 'radius of doom' graphic showing how some new junk-box Iranian missile could reach Israel. Another time, he introduced Mort Zuckerman who launched into an anti-Palestinian rant, again irrelevant to any business news. Stunts like these should be career-ending.
On Mar 13 01:05 PM utilitus wrote:
>
> And I gather that Quintanilla is a long-time zionist. I couldn't believe it when, apropos of nothing, he produced what looked like a hand-drawn 'radius of doom' graphic showing how some new junk-box Iranian missile could reach Israel. Another time, he introduced Mort Zuckerman who launched into an anti-Palestinian rant, again irrelevant to any business news. Stunts like these should be career-ending.
On Mar 13 10:59 AM Hedged In wrote:
> Perhaps the underlying problem with CNBC is that it's running commentary
> throughout the day -- and that means that the anchors never have
> time to stop and think. They just have to talk. And if you have to
> talk the whole time, it's not surprising that much of what you say
> is worthless -- or worse.
Jon Stewart was quite candid when he said that the lesson people should be taught is that making money through study, research, and work is the only respectable way to make a honest profit. Not hey, gambling and churn can make you a huge profit every day.
If financial news was served up on air in a candid way I think the adrenaline rushed audience would get bored and flip channels after the first 5 minutes.
To take it even further, people have been saying that news itself is being polarized with left wing news organizations leaning further left and right wing organizations leaning further right. Like Cramer, the shift is due to appealing to their target and/or captured audiences over any attempt to be substantive or impartial.
The waters between "news" and show have been irrevocably muddied in todays world leaving us cynical and looking for avenues from which to glean deeper facts. Hopefully, this site and others will contiue to try to pursue elements of fact over simple audience bias.
I am hoping this site will never be a bear leaning or bull leaning blog. Nor do I want it a churn blog or a buy and hold one. Inevitably the quality of this site like so many others might be largely driven by whether or not its readers are mature enough to seek information and honest discussion rather than simply expouse simplistic talking points or fill up on the buy and sell daily trade fixes. For that I reccomend CNBC.
Constructe now known as Moon Kil Woong
That makes the data from his show more meaningful then anything you get anywhere else in TV-land. Analyst recommendations and ratings are a complete joke, most other shows are just opinions on opinions on opinions on opinions, not to mention colored by particular political views which makes pretty much everything they say meaningless to an investor.
The only other meaningful bits of information come from detailed analyst reports (NOT their recommendations, but the actual reports), and SEC filings. And that is it. Stewart certainly doesn't provide anything over Cramer when it comes to an investor making an informed choice.
The rest of CNBC can go rot for all I care. Such meaningless drivel I wonder how Wall Street can even manage to survive when Cramer's show is the best on CNBC and CNBC's coverage is the best of all the cable networks. Just about everyone assumes that the TV audience is made up of drooling idiots. Cramer is the best of the lot, frankly. At least he isn't condescending to his audience.
Some people just can't get over the theatrics, but Cramer himself will tell you (usually several times a week) that there is a difference between his theatrics and how he actually wants people to invest.
-Matt
People here on seeking alpha are more familiar with the way Wall street works, and know to take what is babbled on TV as a grain of salt. But the fact is, (and Stewart understands this) is that the average CNBC watcher and financial layman does not know any better. They are being swindled.
As for me, I will continue to watch CNBC because it's a great investment tool. There's no better way to gauge what the masses feel and what they are being fed.
Their floor reporters also seem to do a reasonable job of reporting (with a whiff of bull bias--especially Pisani) what is going on in their respective markets and, FWIW, I actually enjoy Rick Santelli--although sometimes I can't listen as fast as he can talk.
Their afternoon shows are absolutely horrible, starting with Maria, the softball pitcher and fawning princess. Follow that with the utterly ridiculous "Fast Money" crowd (to call them financial "frat boys" is to flatter them) and the two Ks and you have the makings of a disturbing, disgusting, and disreputable perspective on investing and economics. They all are just horrible.
And, lest we forget, Fox Business News spends the hours after market close in a bar. Good for drunks and degenerates, but not much insight into economics and markets.
I'll take Pimm Fox on Bloomberg any day.
Stewart is clever about running a conversation. His approach can be adapted to other political perspectives.
In Wall street parlance this is known as "distribution" of shares to the retail general public just before a steep price decline starts. Others may call it "pump and dump".
How much of this was known by Jim Cramer is uncertain, but I find it difficult to believe that someone of his stature and inside connections with 29 years of experience on Wall Street "new nothing" of the pending demise,disaster, and complete failure of Lehman Bro.'s, when he highly recommended the purchase of their stock just weeks before the complete failure happened.
Short of a complete failure, how about just the probability of a steep and protracted price decline?
What does this suggest about his credibility and
believability?
I am making no claims , you be the judge.
I'm glad Cramer is finally getting his. Anybody who takes investment advice from a guy who spends more time hitting buttons on a "wall of sound effects" instead of explaining his advice should have his/her head examined.
Perhaps now someone from the SEC will investigate Cramer - yeah, right! The SEC should investigate itself first!
bloomberg is not perfect but they are not wall street/corporate shills. they still see themselves as financial journalists instead of circus performers and they take the time to pick the brains of those guests who do have brains. that's something cnbc could never do because their guests lack the first requirement of brain-picking, which is having one.
On Mar 13 02:59 PM Ricard wrote:
> Very well said. I can't agree more. If you are looking for financial
> commentary or food for thought, I'd recommend Bloomberg over CNBC
> any day of the week.
CNBC is not your mother. CNBC should not be expected to tell you what to buy and sell. It's only a forum for diseminating information, for which you the viewer, must take the time, energy & responsibility to study, analyze, and draw your own conclusions about what to do with your hard earned money.
There will always be bulls & bears -- that's what makes a market... buyers & sellers. CNBC does a great job with its guests, presenting both sides of the trade. It's up to you, not them, to profit from it.
There are a lot of good reporters there who try to bring out all sides of the issues and help listeners understand what's going on.
Joe Kernen, Mark Haines, Steve Leisman, etc.
On the other hand, there a few who don't struggle with the truth: Larry Kudlow, Melissa Francis, Steve Moore. They already know the answer to all the world's problems: lower taxes. They're totally useless in my book.
Then there's Cramer: He's a good entertainer, a smart guy, and I think sincere. Did I mention obnoxious?
But that's just for entertainment. He does try to really explain things for people. You gotta give him that.
And what about Santelli? In spite of his unfortunate outbursts, you gotta like the guy. He's got a great smile. He's got an excellent perspective from the floor in Chicago. I find his comments insightful. He's just got to remember that the folks around him on the trading floor are NOT a representative cross-section of America.
Stewart, by his own admission, only sets himself up as a farter, from both ends of his spine. Living down to that is a tad easier.
Sad that the latter was the only one calling out the former. Sadder still that the calling out from that source stuck. Ouch.
Well, isn't that special ? And, apparently, a well-rehearsed and crowd-tested line, certain to humiliate the guest. And, more importantly, make it a YouTube hit.
But Cramer wasn't co-operating! Cramer was actually agreeing (If only Santelli hadn't cancelled-- then we would have had a show!) with Stewart, so Stewart had to keep interrupting him with more of his populist rant.
When the sole purpose of a TV segment is to give a real "Wall Street type" his comeuppance, regardless of how the "guest" is responding, is there any problem with that ? Does it matter if the moralising host has no discernable new ideas to share ? Is it because the host is just doing "entertainment", and therefore is not subject to the high standards of gambling in the stock market, which, as we have been told "is not a fucking game" ? (Except that it is the biggest game in the biggest casino in the world)
Yes, it was a true "Peasants with pitchforks" moment. Red meat served up to an audience that is starving to take someone down for this financial debacle.
But there seemed to be no other point. I guess it was just a "f*ing game".
Take CNBC for what it is - one data point in a sea of information. If Jon Stewart and others think CNBC is fixing the information, then great! Trade against it and make money!
Here's how I use CNBC. I record the first two hours. Then I watch it racing past the MANY MANY commercials they have in about 15 minutes. When I'm done, I know where the futures are, the overall sentiment of the market and what the key economic releases are showing. I then adopt old methods of investing - diversify (I use only ETF's), research (look at boring SEC reports), and stay disciplined with my strategy. At the end of the day, if I want a good laugh, I watch Jim Crammer. So far, no one has held a gun to my head and said, "you better watch CNBC!". They also don't tell me I have to watch Jon Stewart. So I don't. I think I'll go kiss my wife, watch the sunrise, and breathe in some fresh air.
<<Anyone who watches CNBC and makes buy/sell decisions without doing their own due diligence deserves to lose money.>>
That post really sums it up. I have been investing for 17 years now. I can still remember the first time i watched CNBC in the mid 90's.
Yes, it has evolved over the years into a bit of a shill, pump monkey circus, for gamblers.
In the end however, everyone no matter who you are, is responsible for their own investing decisions, and their outcomes. Simple as that.
The idea of the viability of mixing "edutainment" and investment information is as rediculous as mixing fine wine and castor oil.
Being pleasant, friendly, courteous, happy, jovial, etc., should be fine on a news or investing program. Being the court jester (Cramer) or the hanging judge (Kudlow)are two inapporpriate roles to honestly informing the public about investing. So, definitely shut off the machine when shout-down-the-guest Kudlow comes on and turn to Bloomberg, where there is a much less frenetic and far more intellectually honest pursuit of information.
Also, I totally disagree with the heartless people above who say that each person is solely responsible for his own information gathering. Wherever we see the truth being betrayed we have to point out the hyped misinformation or dysinformation. As fellow human beings it's our responsibility. Or do you subscribe to the selfish thesis espoused in the question "Am I my brother's keeper?" If that's the case, there's a lot about life that one still has to learn.
In fact, we all lose when market manipulators make money because it takes away from legitimate investors' gains. The irony is that these people and these activities are often defended as 'free market' activities by the 'less government oversight' zealots. Isn't this kind of like saying that we need fewer police and judges because they get in the way of 'free behavior'? Obviously we need MORE government oversight to ENSURE a free market. Just as we need to keep criminals off the street, we need to keep them out of the markets. If only we could do a better job of both!
What are you waiting for ? I gues Stweart's lberal investment advisor did not do so well using Cramer's picks in Jon's portfoloio !!!!
Attack the choosen one Mr. Obama and look out !!!
the liberal storm to his rescue.
As for me I get my investment advise from liberal
TV Comedians .
Do you own research and home work no one takes care of your own money better then you yourself.
Who makes beer bottles anyway, I think more people are buying it.
Cheers DuffBeer
btw, i DO listen to rick, pisani, the nasdaq guy, as they are giving accurate battle info that is up to the min.
and fire whoever put Karen Fineman on a panel of boisterous traders [Fast Money, the after-hours discussion show]. her only plus is that she never interrupts anybody, and that's because she doesn't have anything to contribute, except a perpetual short-seller's scowl.
You're paying for the access to info through your cable or dish providers, USE that info to make yourselves smarters & wealthier ! Don't "shoot the messenger" just because the message beared bad news ! (ie: markets being down & your net-worth along with it !)
WATCH CNBC (etc), Become better informed (to reality) than you would otherwise be watching late night cable tv talk shows ! Give yourself an edge going foreward, & If you really want to point fingers & put the blame for your lost wealth, or job, or home, I suggest you pay closer attention to what your federal gov't has done & is doing, either to help or to hurt you & your families going forward ! "Mark to market" accounting, Up-tick rule removal, "free trade" that will continue to export our $ and our jobs overseas (remember Ross Perot ? & "the great sucking sound" ?) All of these things brought to you by our elected leaders !
Make sure you really UNDERSTAND what is going on around you before you start shooting messengers !
Booyaa Jim ! Still watching CNBC in Ohio...
'drew...
The thing I hate most in CNBC are the big noises created when new charts are brought on to the screen. Very annoying.
Bloomberg TV is less entertaining but a bit more factual and less pushy about investment ideas. That is were I stay parked.
For most of us on seekingalpha, it goes without saying that CNBC broadcasts their scheduled programming to a global audience, and by the time you hear them pick up on a story - that story has already effected the markets.
A more accusatory argument, and also my personal opinion, is that CNBC relies on online brokers and other agents advertising dollars to operate. Those businesses make money on trading frequency rather than profits. They also are in a powerful position where they can reach hundreds of millions of homes around the globe, and seem to have utilized that luxury to deliberately spread dis-information about how and why the market moves - on both intra-day and long-term basises.
They do this because if you are an trading company on Wall Street, you likely make the bulk of your money by profiting from others transaction costs. They get what spills out of your cup everytime you fill up. Those "collection agencies" reside where the real money is made and where the real influence lies.
Many Wall Streeters don't know any more than you or I, and likely much less, about analyzing financial statements and dealing with risk management and risk/reward. That is not their business for the most part. They are not better traders than you or I, but merely the beneficiaries of our fear and greed surrounding money and our propensity towards taking an action - any action - to appease our emotional state.
CNBC begins their market-hours broadcast right off the trading floor of the NYSE. They end it right there too. Right in the middle of Wall Street. Right in the Middle of the private trading firms, the investment banks, and all the enormously wealthy money changers/handlers of the modern age. Their incentivized to create more transactions, and you are their target.
Buy Monday and Sell Thursday. Buy Thursday and Sell Monday. It doesn't matter what's going on. It doesn't matter what you are buying or what you are selling or whether you are making money or not. It doesn't matter what the market does. The goal is to keep you trading, to keep you from investing for the long term.
CNBC as a collective organization was unaware of and powerless against the recent market crash, although to be fair many of the more intelligent inside the company likely agreed with "The Economist" magazine which often argued in 2007 that most asset values were overpriced globally. The important thing is not to harp on them for helping cause a crash or deepen it - asthey most certainly didn't cause it.
Rather, it is their indefensible new catchprase they can't stop agreeing on that "Buy and Hold investing is dead." In this kind of environment, where everything is cheaper than it was before and therefore is - with hindsight's clarity - a much better buy and hold than before.
Yes, if you can avoid watching CNBC, I'd recommend it. You could find yourself saving time and money. There is also a large, though subtle, opportunity cost to watching the network,especially in light of their existing at this moment many attractively priced small, mid, and large-caps out there.
Think about sectors you think have strong still have growth potential, or sectors you think have been unfairly punished. Then analyze a few companies in them and find ones with a strong balance sheet that illustrates both a strong margin of safety (high percentage of tangible assets and or only cash vs. current market valuation) and growth potential. Those companies are out there and you can find them if you put in the time.
An investor should spend time studying companies that they are interested in and watch these news channels (including CNBC in this category) to get the news.
And with valuations beaten down now beyond likely earnings decline, the current pessimism could be used to pick-up gems. Caveat being investor has to be in equities IFF one has a long-term holding ability.
Larry is as rude to most of his guests that veer from his doctrine as Hannity is to anyone to the left of Attila.
On Mar 13 12:17 PM silverwood wrote:
> The only show I watch on CNBC is Kudlow and Company. Not because
> I like Larry but because his guests usually will give two side of
> an issue, which is more a like debate to let the viewer draw their
> own conclusions.
1. Cramers 25 rules for investing reprinted here
2. Wait 5 days before committing money one of Cramer's suggestions
3. One should spend an hour a week on each individual company they own equities.
none of these rules ensure profits but they do help miminize losses. I do not take Cramer's pics but when I stray from his rules I get slaughtered. His TV is enertaining period. Get past the hype and use it to keep your interest. Earlier posters do say you are responsible.