TheStreet.com’s Marek Fuchs wrote that he was generally pleased with the coverage he read about the Dow Jones industrial average hitting a new high earlier this week, and he thinks that’s a positive for investors.Fuchs wrote, “But before I show you some examples of how coverage has been relatively tempered, allow me to pontificate for a moment about why nothing is a better indicator of a market’s direction than the tone of coverage.
“The business media, as a professional entity, should be operating on a higher plane than the general public, but with its many flaws, it does not. As a result, what you see, read and hear tends to be a near perfect reflection of market sentiment.
“When the boys and girls at CNBC could not contain their glee at new highs in 2001 — and also the fleeting one set this past January — it was reflective of an overly excited public. And overexcitement is always weaned out of high prices with lower ones.
“But simply saying that public sentiment is reflected in business media coverage does not go far enough.
“The business media, despite their flaws, are influential enough that they also drive public perception. In other words, it’s a self-fulfilling cycle. Got that?
“They’re no better than us, but they hold the power to sway us.”
Read more here.