Finance professor: Financial coverage can cost you money

Finance professor Scott Brown writes in an opinion piece that the business media can cost people money with the stories that they cover.

Brown writes, “You have to remember that the news media are constantly competing to survive against other stuff you can watch. If they don’t always sound like they know exactly what is going on then you won’t watch their presentations. If you don’t tune into their show then their ratings go down. If their ratings go down they get fired and their show gets cancelled.

“This means that financial journalists are in the business of finding great stories and sounding like authorities no matter what. The stock market is a great place for them to dig up news ‘scoops’ to feed to the public. They don’t really check their facts very well and sometimes not at all. This means that if some insider wants to feed you a line of bull manure then all they have to do is maintain good connections with financial journalists, sponsor an investment show, or outright buy an investing TV channel like Jack Welch the CEO of GE did when he set up CNBC. What a great way for inside executives to control the flow of news information to the public then to actually own one of the only financial news channels…but not so great for you!

“These journalists also kick up the fire by bringing in so-called ‘experts’ to talk about each side of some topic that real experts would not consider important.

“This just makes it all the more confusing for the public to understand what is important when buying or selling a stock.”

Read more here. Not sure I agree with the fact-checking part, but it’s an interesting read nonetheless.