Traders profit best when ignoring financial news

Jonathan Hoenig, a manager at a hedge fund, writes on the SmartMoney.com web site that the best investors do well when they ignore what they read about in the financial press.

Hoenig wrote, “While I have plenty of respect for television business news, I simply don’t want to be influenced by it — even by the order of stories they choose to cover. If an anchor leads with fancy graphics about the tech-stock rally and buries word about the falling dollar in the last two minutes of the broadcast, which story do you think you’ll be likely to weight?

“The printed word is not bound by a ‘hard out’ commercial break, so I opt to read my financial news. Some of it is actually useful, and reading itself also happens to be relaxing and pleasurable activity. Like Alan Greenspan, I spend many hours in the tub with a stack of reading material about the financial world.

“I try to read only select financial news, not analysis or opinion. And I’ve trained myself to read it in a particular way, concentrating on certain elements and either discounting or skipping others altogether.”

Read more here.