Clash of the Financial Pundits
Book

Clash of the Financial Pundits

How the Media Influences Your Investment Decisions for Better or Worse

Joshua M. Brown and Jeff Macke
McGraw-Hill, 2014

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Financial pundits Joshua M. Brown and Jeff Macke explain how to listen to financial pundits with a critical ear, keeping in mind each speaker’s biases and your investment goals. Regular viewers of CNBC and other financial networks will relish their interviews with stars such as Jim Cramer and Ben Stein. The authors advise using financial commentary to build your knowledge, but not to guide your day-to-day investment decisions. At their best, the authors provide biting commentary on the clichés of financial television. At their worst, they indulge in some of those clichés. getAbstract recommends their insights – including the wise counsel to use financial media in moderation – to consumers of financial commentary.

Summary

News and Noise

Financial news and commentary are everywhere – on cable television, blogs, in newsletters and on social media. For ordinary investors, sorting through it all and figuring out what to do is harder than ever. Some say you should turn it off altogether. Just build a diversified portfolio, let it grow and don’t worry about the news. The trouble is, if you want your money to grow, you need to stay abreast of events that affect your investments. Sometimes you need to act based on the news – or make an informed decision not to act. How do you find actionable insight amid the noise?

For starters, realize that financial forecasters speak with limited information. They can’t see the future. Their biases color their opinions – much like a political commentator who sees the world through a partisan lens or a sports analyst who roots for the home team. As Warren Buffett said: “Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”

Choose your experts by understanding their affiliation, viewpoint and track record. Pick a few you respect, follow them closely and tune out the rest. Consider your experts’ comments in...

About the Authors

Joshua M. Brown, a CNBC contributor, created The Reformed Broker financial blog and wrote Backstage Wall Street. Jeff Macke, a Yahoo Finance commentator, is a former hedge fund manager and part of the original on-air team at CNBC’s Fast Money.

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