Should What The Media Says Worry Investors?

Discussion in 'Stock Market Education' started by Rainman, Jul 18, 2015.

  1. Rainman

    Rainman Senior Investor

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    The media will print, broadcast or post [online] anything negative they can get hold of because people like that kind of stuff. Should rumors surface that a company whose stock you own might make losses or any news that might taint the image of the company [is circulated] making it relatively easy for them to lose some of their customers should you sell the stocks you own immediately before the stock prices plummet or wait a little while before making a move?
     
  2. baudwalk

    baudwalk Senior Investor

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  3. richc3

    richc3 Senior Investor

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    Well, what's interesting with the media as it pertains to stocks is that it sometimes follows a bit of a self fulfilling prophecy. They report on something and a few people with trigger fingers instantly sell, all of a sudden that scares other investors and they follow suit. Next you're -3% or -5% and even more start to sell. Now, some people will buy in around these times, sometimes institutional investors like to rattle the cages before they buy in themselves, but it's a tricky scenario because there's a saying that you never try to catch a falling knife. So when a stock drops is it just an overreaction? Is is some sort of stock manipulation? How firmly do you have a foothold in the fundamentals of the company and their long term success?

    Most of the time I can ignore the news, but one example of a company just being brutalized by the media is/was BlackBerry. There was just seeming no way you could win with that stock for a good stretch of time and it was getting trashed everywhere and by everyone.
     
  4. Penny

    Penny Well-Known Member

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    Other investors are highly emotional. So what the media says matters because it will effect how the stock is traded, and hence its value, and hence the viability of the company. No matter what facts you may know about the company itself, the value of the stock is determined by more than that. So yes, media reports matter.
     
  5. atanasster

    atanasster Active Member

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    Agreed - the media can influence the stock price
     
  6. rightct

    rightct Well-Known Member

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    Why would we? Well, I haven't invested in many things until now and can't really offer an unbiased and 100% truthful experience, but it's wrong to believe most of media unless you filter that information accordingly. If you see something somewhere and don't mind checking what you read at all, you are to be blamed, to be honest.
     
  7. Sunflogun

    Sunflogun Well-Known Member

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    The media always come late as far as I see it. The investors need to be a step ahead of the media if they want to be making money, after all the media is writing about what they did. ;)
     
  8. pwarbi

    pwarbi Senior Investor

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    When it comes to investing, while it's good to get other opinions and information, at the end of the day it's always better to go off your own judgment. People read markets in different ways, and while the information they share can be valuable, a lot of the time it's too easy to just go along with the crowd, and sometimes that can be costly.
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    The vast majority of what you hear during the day on CNBC is just babble from a handful of commentators who are paid to talk.

    You get a little good info here and there from the odd expert - info that may or may not pan out in the days / weeks / months or longer to come.

    You occasionally get something during trading hours that will likely move a stock greatly in one direction or another that can be acted on very quickly. But this can be risky - most of what you hear won't move a stock much, if at all. And sometimes it may move in the opposite direction you might think it should - you just never know what will happen to the buys and sells of a particular stock in the ticks, seconds, and minutes that follow such news.

    You either have to learn what to ignore (most of it) and what to pay attention to (a little of it), or else ignore it all and stick to 100% doing your own research and investing long term. The broad market is gonna do what it's gonna do.
     
    Last edited: Jul 22, 2015
  10. baudwalk

    baudwalk Senior Investor

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    I find the traders' ideas and diIscussons on CNBC Halftime Report (12 N EDT) and CNBC Fast Money (5 pm EDT) to be the most interesting of the day's programming. Ideas for the watch list, a perspective on the international markets, sector shifts, and some of it is just fun. I record the later show, and spin through it later in the evening.

    Jon Fortt seems pretty down to earth in his technology pieces, and his Periscope discussions are interesting.

    That said, CNBC's incessant promotion of Apple drives me crazy unless I turn on my built-in between-the-ears Apple filter. I understand that $AAPL influences the market averages, but there is other news out there, and Bloomberg's scrolling sidebar does a decent job of that.
     

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