One of my favorite podcasts, The Ryen Russillo Podcast, which is sports focused took a recent detour and interviewed CNBC anchor, David Faber. Faber is one of the most impressive and listened to CNBC personalities, and they discussed covering the markets. Eye-opening stuff if you’re trying to decipher whether CNBC is an investor friend or foe.
My opinion has always been that if you view CNBC as entertainment, it’s interesting and informative. If you view it as advice, beware.
Faber is on this episode between minute 41 and 1:19. Definitely worth a full listen.
- Ryen and David discuss that there “always has to be a reason”. If markets move a certain way, you have to have a reason why that you can explain on TV for content purposes even if there really isn’t a reason. So, when you hear Dow down X because someone did something somewhere that’s not necessarily what’s going on. The better interpretation is that Dow is down X and we had to tell you why, so this was what we came up with today. As Faber says, “a lot of days nobody knows…there’s not an answer.” Beware the narratives and don’t make changes based on them.
- Faber shared that ratings spike during periods of fear and greed. In my experience, that’s when the bulk of investment mistakes are made. People get greedy or fearful at the wrong time and make changes. Best to change the channel during those environments.
- From the dot-com boom, to housing, to SPACs, and crypto, Faber explains that speculation is constant (although Faber hedges on crypto). The labels change, but speculation is constant in every cycle. If it seems too good to be true, it is. Don’t get caught up in the speculative hype.
- “Everybody is selling. Man, everybody is selling. All the time,” Faber said in a discussion of CEOs and fund managers who appear on the network. Even if CNBC knows someone is terrible at managing money, they’re letting them come on TV to sell. Understand the messenger’s agenda and ignore accordingly.