Should you listen to the talking heads on CNBC? Part One
The simple answer is yes. Why? Because it’s free and if they were your advisor they would be charging you some obscene fee.
But you gotta be smart and realize that the interests of these guys are not aligned necessarily with your interests.
First, the purpose of CNBC (or Bloomberg or Fox or MSNBC et al) is not to make you money, but to make money for themselves. I know, seems obvious right? But most of the time it seems like they have our best interest at heart. They want all of us to make money.
Well, yes and no, they don’t really care as long as you come back again tomorrow. And the day after, and the day after that. They just want your attention, just like Facebook and just like Twitter. All of these media outlets can charge more money to advertisers if they have more eyeballs and more engagement with those eyeballs. Your eyeballs specifically.
One way CNBC does this is they scare you. How many teases do you here for upcoming Fast Money segments where they say that have one analyst who sees something in the charts that could bring this rally to a screeching halt, that could take Bitcoin to zero. I’ll tell you how often. Daily.
So you stay. You watch. Turns out it’s not so scary after all. But don’t miss an episode because you might miss that bell at the top of the market, or the sign that makes this or that definitive
Second, many of the guests aren’t necessarily there to help you either. Most of them are there to sell something and I think even the most upstanding and reliable of them would probably admit it. The ones that wouldn’t admit that, probably should be the most ignored.
Sometimes what they are selling is just a bit of legitimacy and sometimes they are more overt about selling. For instance, just this week Kevin O’Leary closed his final trade on Fast Money Halftime by recommending small cap international stocks. He touted them throughout the show. Guess what his recommendation for this was? A Vanguard low fee international ETF? Nah, it was for $ONTL which is a fund THAT HE OWNS. Feels like advice, but is really just a selling platform.
But on the other end of the scale is my favorite analyst, Josh Brown, who now works for Ritholz Wealth Management. He is pretty up front that he is a wealth manager but doesn’t push his service. He is also absurdly honest about the market imploring us to calm down and shooting down theories and aphorisms as well as the fear mongers. If he is on FM Halftime I always try to listen to the first 20-30 minutes of the show. I wish they sent out a podcast of Halftime so I wouldn’t have to watch it on the DVR or live . . . .maybe that’s on purpose
And then there are a few regulars on the evening Fast Money show. Guy Adami is there almost every day and I can’t quite figure that out. Same with Karen Finerman and Tim Seymour. Do these guys get paid? Anybody know?