“Hey why don’t you switch on CNBC?” asked a friend who was visiting me after several years.
“I don’t have CNBC as part of my channel package!” I replied.
“What? You don’t have CNBC? You are a stock market analyst and you don’t watch CNBC?”
“Apart from this stock analyst thing, give me one reason I should watch that channel,” I retorted.
“Boss, it helps you make money. As simple as that!” he replied with vengeance, as if he was paid to speak ‘for’ the channel.
“The goal of CNBC or any other business channel is not to make you money, dear friend, but to sell advertising,” I said.
Image Source: politicalhumor.about.com
The conversation ended there and then. But thankfully, our friendship has survived.
Why I don’t watch CNBC…or any other business channel?
See, I’m sure the guys at CNBC or any other business channel are committed to doing the best on their stories.
But the problem is with the way they structure their stories, the ultimate aim of which is to keep you on the edge of your seat, and depend on them for advice on what to do next.
When I say “on the edge of your seat”, I am speaking of something like this following video which, in essence, replicates the way most news is delivered on TV channels (business or non-business)…
If you don’t see the video above, see here.
So they would keep you hooked by their “well though out” analyses like…
- “The US jobless numbers were higher than expected – what do you need to know to keep your portfolio safe?” says one sad-looking anchor as if he was fired from his job.
- “India’s inflation has moved up by 0.02 percent over the previous week – can your portfolio withstand a higher inflationary environment?” asks another as if 0.02 percent is such a big deal.
- “How should you get your portfolio positioned before the RBI meeting next week?” questions another.
- And then, “Watch out for our super six stocks after the break!”
The biggest problem with business channels is that they have a ‘view’ (a reason) for every market move.
They want you to live in fear and react to every little hiccup in the market so that you are glued to their network in order to receive the investment advice…err…trading and speculation advice…which changes each business day.
But the truth is that if you are invested for the long haul, all the noise that business channels like CNBC make on a daily basis doesn’t really matter.
Instead, all you will end up doing by watching business channels is constantly churn your portfolio. And you don’t need to be an expert to know that the only person who benefits from that is your broker – whose analysts appear on these business channels to give you ‘free’ advice.
In fact, we can easily draw a correlation between the amount of time you spend watching business channels and the number of stocks you buy/sell every month or year, thereby making your broker rich.
And it looks something like this…
It’s my sincere request – Please don’t get terrorized by the business media into changing your well thought out investment plans. Their only goal is to sell advertising, and not to make you money. And you must know this for a fact.
I haven’t had CNBC on in my home in almost nine years. While my visitors think this is sadist, I believe it’s wonderful. 🙂
Good one . All the people who say CNBC helps make them money, we just need to ask them one question. If thats true , why are you watching it from so many years ! .. Why are you not on vacation !
Vishal Khandelwal says
Well said, Manish! 🙂
Kuldeep Randhawa says
Its not all that we get from cnbc, I often watch interview of finance minister, RBI governor,
various from about personal finance, and listen to the know about whats happening around the business world.
it provide me the valuable data to analyse.
its also true before follow someone , must use your own brain and analysis.
Like warren always says ” Its always mantra of success , you should know what to avoid” ,
I never switch on these channels to get hot tips about stocks investing, in fact i laugh, same guy who said _____ stock is worst and you must sell it , After small market rally , he again advice to must buy it .
Well said, Kuldeep Randhawa.
Well stated, Manish. To extend this further, I have also started asking myself why I am not on a vacation after slogging it out for nearly 20 years to meet other people’s objectives at the expense of my health & happiness! In fact, forget vacations, why is it that I am worried about meeting even basic needs like sending children to school, affording clean water & sanitation, or living a moderately paced life with dignity and respect. When we ponder on such questions, interesting insights emerge on how most of us are living our lives blindly based on other people’s opinions & expectations! So let’s not just focus on the Udayan’s, the Mithali’s or the Tulsian’s! Look closer to you, your friends, family etc! 🙂
Rightly said . Businss channels are concerned only with their revenue and income growing. They are hardly bothered about viewers wealth sinking or growing . We should stop watching these ” selfish business channels .”
In some ways, they just tell you “what you wants to hear?” which also might make you getting addicted to them over time.
They say “You can double your money” and never say “You will loose everything and will go bankrupt”
Imagine the temptation occurs when a person says he can double your money in an year or says he can make you 30% return in 6 months. The TV guy wears suit, raises his voice, argues with anchor, wins the argument, you think he is smart, you are inferior.
Instead, imagine when some one says that he simply follows the process that world’s best investors followed, he doesn’t know what the return would be at the end of the year, he focuses on process and not the return, his focus had protected his capital lot of times, and so on… You can see, its kind of boring right 🙂
Manoj Dureja says
You see the same guy(s) on these channels for years helping audience make money :). How come he hasn’t retired ?
This can be said about TV channels as well as print media.
Very few journalist and channels are seekers of truth but most of them creates only sensation so that viewers/readers are gripped to them.
if you want to develop apathy with these, just read last month newspaper / watch news for some time and we will see these are nothing but noise.
Nassim Taleb had recommended a interesting view in his one of this book. he used to “mute” the channel in his office. This , he said, was more fun.
Agree on Nassim Taleb’s view. Sonia Shenoy does look good than sound good 🙂
@Vishal – you shud extend this title to say, even MoneyControl
I believe Hot tips from channels and othe media made retail investors fingers burned, made them away from markets, this might have affected the retail participation in our stock markets.
Arent newspapers the same too? Eco Times headlines are lewd. Given this, where do you read reliable information? I like some blogs with arrogant founders who speak their mind.
Manish Dhawan says
Leave alone the value investors, swing and positional traders have no use of these channels either. Ed seycota, the trading legend, (just like warren buffet for value investors) advises to file the news in the trash bin.
Not investors, not speculators. I wonder who is the target audience then. 90% or so who lose money in the market I guess!!!
Nasim Taleb in his book talked about human fallacy to accurately find reasons for a given act which was purely random and totally unpredictable.
CNBC TV has this go to lady named Lata venkatesh, whenever some currency or money market, bond market move happens, she is called upon to tell the reason. And lo!!! hold and behold, she comes up with a reason every single time. And a great logical reasonable and awesome explanation every time and makes it sound so obvious. Albeit , the funny thing is she comes with this reasoning after the act has happened, not before. I mean if she could she would be chilling out in Miami beach and not slog like a puppet in front of a camera rite!!
she sounds so confident and I know this from knowledge and reading that almost all the idiots are always that, confident, wise are always unsure.
Bottom line, people in the forecasting business are IDIOTS, and hence their services are for fellow IDIOTS.
No harm done, As Seycota says, everybody wins, everybody gets what they want, some people win by losing money in the market coz that’s what they wanted.
Abhishek Sethi says
Fine. But to take the advantage of the Mr. Market’s behaviour we need to keep a track of it. For example the recent banking stock hammering….we were getting banks(AXIS and YES) for nearly half the prices…and its a no brainer !…..I think instead of avoiding we should need to understand the clear diference between noise and information.
I love watching these channels -they are synonymous to adventure sports ! They clearly tell me what NOT to do (latest hot sector, latest hot stock..). As munger says-invert always invert.
According to the biography, Warren Buffett regularly watches CNBC.I wonder what he got out of it.
Deepak Sholapukar says
may be fun, he too needs to relax a bit by watching commedy 🙂
we cannot do well buy following market……..every day……
thus charlie had said you must know what to aviod…..
I think they have very good programs like LIME or Young turks..
They are definitely informative and offers glimpse of whats future companies look like!
What we should avoid is watching it during regular business hours 🙂
Well…well….I used to watch CNBC Awaaz oftenly just to admire 2 good looking girls…..Swathi and Neha. Now both have quit their jobs from this channel, presumably, as they are not seen since couple of months. Since then, I have stopped watching this business channel and focussing more on websites to fine tune my investment strategies. Cheers.
This article has it all wrong. I work in investment management and we have like 30 TVs in the branch all playing CBNC and other business news networks all day. Nobody sits watching CNBC looking for trade ideas, we’re watching for market news, outlook, and realtime information.
While the stuff we could see on CNBC that is market tradeable is always released somewhere else, either in the quotes software, on the internet, in news websites, or on newswires, they do a pretty good job of putting what’s relevant and what matters upon the screen before we have to go looking for it.
I do get a kick out of the sports-like coverage like Fast Money, with the talking head “experts” making plays, or the absolutely comical Mad Money with Jim Cramer, but I wouldn’t use any of this stuff as the core of an investment decision without doing serious fact checking first.
But these stations do have their time and place. I wouldn’t care if a stock analyst didn’t have CNBC at home (typically when markets are open they’re at work) but if they refused to watch it at all at work I’d be really suspect of the quality of their work. Trading is all about news and channels like CBNC bring news to you rather than you being forced to find the news.
Source: Our institutional trading desk on my floor has 5 TVs all playing different business and market news networks during market hours. They trade about 16 billion dollars worth of securities per day. The moment the market closes, they usually switch on sports or something else.
Poor guy.doesn’t understand value investment.
The CNBC TV 18 or any other business channel is very important for all of us to watch. It keeps you updated with trend in market. You can’t deny the fact that anything and everything companies going through affects the performance of their share price. It is very important to know what is happening and CNBC gives a quick, latest and correct analysis..It is mainly very crucial for “intraday traders”. Long term trades can afford to keep their eyes closed for some time….but intrday ones just can’t..
And ofcourse we must watch business channel in limits…best time according to me is 30 mins before market opening…it gives you a pre opening performance of stocks and on evening before to find out which news is affecting which stock…as I said it’s basically beneficial for intraday traders