What Garners Popular vs. Critical Acclaim?

Over at The Big Picture Barry Ritholtz has some great suggestions about improving financial television. We agree with the entire list, but especially like the following:

1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. People’s retirement and investments are at stake. Please treat it that way.

5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.

6. Separate the Signal from the Noise. Understand that most of the day-to-day action is simply noise. Look at a long term chart, you can barely see 9/1/87 or 9/11. If those major events get lost in the long term trend, what does the intraday jags, kinks and reversals mean? Very little. Recognize that not every data release, slice of news, or rumor is at all significant. Stop treating them as if they were.

7. Fact Check: An awful lot of things on air get stated with authority and confidence. Much of them are little more than junk or pop myths. Why is it that the more dubious a proposition is, the greater the confidence the speaker seems to muster? Consider fact checking as much of the statements that are made on air as possible, and making frequent corrections.

9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week — Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful and accessible. Quiet, contemplative, discussions, with intelligent market participants, revealing helpful information. The investing public would appreciate something of that sort — again.

Improvements Unlikely?

There is a reason for the current TV programming: Ratings!

The experts know what sells. Everyone on TV is asked to state an aggressive and controversial opinion. It is entertainment.

Would the current investing world give a high rating to Uncle Lou, no matter what the quality of the program?

Popular versus Critical Acclaim

We recently watched an old film for which a reviewer had noted that it achieved both popular and critical acclaim.

That is certainly great news for a movie, and one can easily see the distinction. At nearly any time one can find a very popular movie (the "date movie" from back in the day) that has little artistic merit. At the same time, there is something playing at the local Art Theater that scores high on artistic merit, but does not attract many teenagers.

It is a delight when a film can satisfy both criteria. It is also a great challenge.

The Investment Audience

Here are a couple of key facts about the audience for investment news:

• Individual investors have dropped out. (We'll get them back after another 25% or so in the major averages).
• Most readers are obsessed with the negative. That is how to seem smart at a cocktail party.
• One can measure this with objective indicators, like our Seeking Alpha sentiment indicator.

The reader will note that we are moving beyond financial television, and considering all sorts of information.

The Conclusion?

With newspaper ad revenues disappearing, MSM are all turning to blogs. Blog revenue is all about hit count.

If times were more prosperous, business managers could afford to think about the actual merits of analysis. In times of stress, they look for the most popular.

So what happens? We all know from behavioral finance that investors chase what worked most recently. Today, that means that all of the doom-and-gloom predictors are geniuses. Many of those writing and appearing on TV search relentlessly to find the most negative spin on any piece of information.

It is those people who are now featured. It is not because of editorial bias on the merits. It is financially driven. These are the writers who are "popular."

This is what happens editors become pollsters.

Comments

[Fabien Hug:]

Like you say; ratings. People seem to like it. I watch it only when Jon Steward makes fun of them. When you read SA you can also see that opinionated articles collect the most comments. It's my impression that people, deep inside, prefer a good emotional argument than rational discussion.

Jun 09 12:11 PM

[John Lounsbury:]

Jeff - - -

Good observations. It is being left entirely to the observer (reader) to determine what has value in the information wilderness. Sometimes what is popular and entertaining has value, but, all too often, what is useful is boring and ignored. Maybe I shouldn't complain, though, because such a situation is opportunity for those who will put in the effort to analyze content. I try to be such an analyst, but I must confess that I am distracted by some of the popular noise. Messages of the day - discriminate, focus and pay attention. Excuse me now, I have to watch CNBC.

Jun 09 12:17 PM

[Larrysyr:]

I think there's a formula in this. Make one prediction, stick to it until it happens, then proclaim your omniscience (loudly). Guaranteed formula to a six-digit gig.

The "average individual investor" has never known what is going on, and has trusted "financial advisors" to guide their investment decisions. It is the rare advisor who actually told a client they could actually lose over the long run in the market. Most of the sales pitches for mutual funds, 401(k)s, etc. scared unsuspecting people into thinking they needed to invest in stocks in order to assure a comfortable retirement and that no other strategy was wise.

So now we get financial news as entertainment rather than information. Not only does it bring higher ratings, it also distracts the unsuspecting from the reality that no one can actually predict the market.

I agree with your idea to bring back Louis Rukeyser's style. Until then, I'll get my financial info by sifting through written material and finding authors who seem trustworthy and reserve my TV watching time for truly entertaining shows.

Jun 09 12:24 PM

[TinyTim:]

I miss Rukeyser

Jun 09 02:12 PM

[market ace:]

Anyone that uses the "financial media" to direct their investments is just looking for trouble and massive losses. As stated most of it is just entertainment and provides no useful information. This will not change and worse yet some on tout TV have the ability to move the markets in stocks that they really know nothing about and do not care about.

On the other hand the "professional ANALyst" with their upgrades and downgrades are mostly just guessing or are pushing thier firms own stock holdings and certainly cannot be trusted - especially when they come from failed banks that obviously know little about fundamentals of a company.

I am shocked that the writer somehow finds an overwhelming amount of "negative" guests as all I see are the "be ahppy - see no evil" crowd that are the Pied Pipers of Wall Street and totally unrealistic with their eternal oprimism.

There is no substitute for one's own DD and ignoring all of the noise of other so called experts that only tout stocks to you for a living instead of putting their money where their mouth is, is critial to a person's financial well being.

Jun 09 03:55 PM