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By FS Staff

What sells better than sex? In the business of financial journalism, nothing - and I mean nothing - tops fear.

I'm not just talking about a little bit of fear either. No. We're talking all-out financial Armageddon, economic devastation and collapse, and the worst of all possible scenarios crouching on your doorstep ready to jump out and get you at any moment.

Welcome to the doom-and-gloom "financial-tainment" industry, which, having exploded in popularity ever since the 2008 financial crisis, will say anything to grab your attention. If a sensational title with limbic-priming powers doesn't work, throw in stimulating visuals of nuclear explosions-that always does the trick!

In case you're not sure whether the sites you're visiting fall under this category, here are a few tell-tale signs:

  1. Anything positive about the economy is actually negative or the result of government manipulation.
  2. Gold and silver are always on the verge of exploding to $5,000, $10,000, or more.
  3. Headlines like "World War III, Total Global Collapse, & The Greatest Depression" make a frequent appearance.

Given that many of these sites are quite well-known for making such imminent crash or collapse predictions on a consistent basis, why do they have such a large following after so many failed calls?

In his recent Big Picture on this topic, Jim Puplava says that many people have unwittingly bought into a highly addictive, sensationally-driven religion of doom-and-gloom.

"You go to the headlines and every day is a bad day. Everything is a crisis. And there is no balance to the coverage. It's just like I'm going to just scare the wits out of you…One site had four different stories all predicting an imminent crash…never mind that headlines like these appear every single week!"

Is this really the world we live in where everything is ready to collapse in a moment's notice? In the doomsday industry, yes, it is. Every war is a possible prelude to World War III. Every market correction is a prelude to another financial crisis. Every poor economic statistic is proof of a coming collapse.

In theory, this could all be true. That's why framing any event in this fashion is so tantalizing. When we look back, however, we see that this is not how the world really works. Like broken clocks, such predictions may eventually be right, but at the expense of being wrong most of the time.

Unfortunately, because many of these sites or commentators expend a fair amount of time and energy looking for anything that paints a bearish or fearful outcome, their followers end up doing the opposite of what longtime investors, like Warren Buffett, have cautioned when making investment-decisions:

"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful." - Warren Buffett

On the flip-side, this doesn't mean you should simply ignore bad data, or fail to take appropriate actions when necessary. It does mean, however, that it's sometimes a good idea to ignore bad reporting or, at least, understand that it's simply for your entertainment and not much else.

Then again, you may save yourself a lot of money by seeing a movie instead.

Source: The Religion Of Doom And Gloom