Why more isn’t better when it comes to news

The front page of right now has zero articles on the Polish election, but it does have articles articles on Adele, “Celeb couples who have reconciled”, and “Selfies of the week”. This is why I can’t watch most mainstream news.

The front page of right now has zero articles on the Polish  election, but it does have articles articles on Adele, “Celeb couples who have reconciled”, and “Selfies of the week”. This is why I can’t watch most mainstream news.

When I started out years ago, I had tons of RSS feeds and Twitter feeds that I was following, and I had multiple news pages bookmarked. Now, that’s gotten trimmed down severely.

The only two paid subscriptions that I have are the Wall Street Journal and Barron’s. That’s it. As far as free content, I usually read Abnormal Returns, the front page of Wall Street Oasis, Real Clear Politics, the front page of Bloomberg (despite their increasingly annoying layout; please bring back the classic plain black screen), and a small set of blogs that I have found to be legit. That’s about it.

The most valuable that I’d consider: none of the above, but rather a ticker board that I have set up that lets me see what’s moving up and down, and by how much. Not opinions, but reality.

It’s not about more information. It’s about more good information. It’s not even about being the “first” to get information. Maybe if Rolling Stone did some basic journalistic due diligence, their “Rape on Campus” story that turned out to be completely false wouldn’t have gotten published and ruined the lives of many people at UVA for months until it was finally discredited.

But, they were first to break the story! And, it got lots of “likes” on Facebook and upvotes on Reddit!

If you’re not working in financial markets or don’t have colleagues that you can talk markets with, one of the best things that you can do is get involved with a group like the CFA Society. It’s rare to find a group where you can discuss finance—intelligently.

Intelligent is a key word. I overheard someone I know make a comment, which I could tell from the context was complete nonsense, that “I’ve been reading that lots of institutional investors are about to buy [redacted] stock!!”

Oh really, and where did you read this? Snapchat?

The Polish election is important because it’s a NATO country, and formerly a Warsaw Pact country, that borders Russia. In case you’ve missed out on the last 15 years of news, Russia is led by a guy named Vladimir Putin. Opponents of Putin, like journalist Anna Politkovskaya, former FSB operative Alexander Litvinenko, or Ukrainians in Crimea, tend to wind up dead. Oh also, Russia has a lot of oil and gas (and soldiers, but that’s another story), and Poland sits between it and the European Union.

Selfies of the week and celebrity couples are important because…I don’t know.

You probably apply this BS filter already to your regular news, or else you wouldn’t be reading this article and probably would be reading Buzzfeed instead. You need to apply it to your financial news as well. What some random dude on Stocktwits thinks about your investment thesis isn’t as important as you doing your own due diligence, digging into the 10-K/Q filings, understanding the industry, and coming up with your own conclusion.

If you keep chasing whatever hot story pops up on your news feed or whatever article has a lot of “likes” instead of thinking for yourself, you’re going to keep finding correlations without causation, and you’re going to end up in the classic retail investor trap of buying high and selling low. Fear and greed, not discipline.

It’s annoying enough as it is now. Just wait until the next major bull market and everyone and his grandmother suddenly thinks that they are an “active day trader.” Yikes.

If you want a good book about this topic, check out my book review of Nate Silver’s The Signal and the Noise:

Keep hustling,

Alex Cook

PS: If you liked this article, please share it on your social media to friends and colleagues. Also, I have more content on my YouTube channel here, like my video on how I got through the CFA Program: