Boston Advisor readers know I’m a big NBA fan. If you’re new here, check out Revisiting the Last Dance and Should You Diversify or Concentrate?, where I explored investing through a fantasy basketball lens.
This time of year – the NBA playoffs – is when the league is at its best. High stakes, best-of-seven series tell the ultimate truth about players and teams. Fans also end up watching more national broadcasts than during the regular season.
Which brings me to Kendrick Perkins.
Not just Perk the analyst, but what he represents: outspoken hot take artists who have taken over media. Quality analysis from guys like Zach Lowe is out, and loud attention grabbing nonsense is in.
Think I’m exaggerating? Check out this SNL clip.
Why is this happening?
Because it works. Media chases ratings and clicks, and bombast sells.
Unfortunately, it’s not just a sports media formula. The same thing happens on the financial media platforms. For every insightful voice – like Tim Legler or Bob Myers in sports, or Michael Santoli in finance – there are numerous attention-seeking performers outdoing each other.
(Quick aside: this is probably why podcasts are thriving – they’re delivering stronger, more focused, and less noisy content).
If you’re not an NBA fan, you’ve probably noticed this in other areas that interest you.
The News Isn’t Even Entertaining
I constantly hear people complain about the media – the hyperbole, bias, inaccuracy – then turn around and give the financial news power over their portfolio.
That doesn’t make sense.
Bombastic business model aside, as I explained in Protecting Your Portfolio from the News: Markets discount, and the news reports. Getting that backwards can crush your portfolio.
That, plus the fact that they’re usually talking their own book or reflecting their own biases, makes it a poor source of investment guidance.
Then we get to the fact that they’re brought to you by the same incentive model as Kendrick Perkins.
They’re not providing advice. They’re giving themselves good ratings, so don’t let them make you panic, get greedy, or otherwise change your strategy.
Even if you think you’re just being entertained, constant real-time market commentary is harmful. It increases anxiety, weakens your long-term conviction in the market, and makes you more likely to act impulsively.
Turn it off.
I’m convinced that if the average investor focused on what the market has done long-term and ignored the short-term gyrations and commentary, they’d:
- – Have more money invested in stocks
- – Hold less cash
- – Feel less FOMO
- – Avoid chasing bad ideas
- – Be more confident in their portfolio and financial plan
If you’re interested in investing, use the time to learn about things at your own speed and pace. Here’s some recommendations to get you started.
If you’re not interested? Take that time back for other things.
