The financial media and the stock bubble

Dwight Cass writes on Fortune.com about how the financial news media are currently analyzing the stock market’s current conditions.

Cass writes, “Skepticism about the sustainability of the remarkable 2013 bull run even has made a welcome appearance in the mainstream business press’s financial blogs. But to give investors the tools they need to understand the market’s current behavior, the press needs to make a far greater effort to bring the debate to a broad audience in a sophisticated yet accessible way.

“Concerns over asset prices could fade if today’s rebound continues. That would be a shame. A public dialogue open to non-specialists, with both sides adequately represented, would be a healthy development.

“There are some moves in that direction. The Wall Street Journal is the finance business’s traditional mouthpiece. But its bloggers occasionally slip the leash. Yesterday’s column by Jason Zweig, ‘When Does A Bubble Spell Trouble?’ is a good example.

“Zweig says, essentially, that individuals who invest based on the belief that rising stock prices are justified become increasingly intolerant of those who argue that valuations are too high, and that their intolerance grows as prices continue to rise above historic norms. This infects the media, and harsh criticism of skeptics keeps commentators from throwing the word ‘bubble’ around too freely. So the current broad debate about whether stocks are in bubble territory means they’re probably not.”

Read more here.