Broker Check

They Shouldn’t Give Guys like This a Microphone

| August 16, 2016
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Investing is tough, plain and simple.  The psychological anguish is probably the biggest hurdle most clients have to deal with day in and day out.  The 24-hour news flow, the internet, phones, the talking heads…you get the idea.  People also throw their own view points and beliefs into the process, and what you end up with is bunker mentality to investing.  To make it even worse, people pay attention and retain negative information over positive information at about a five to one ratio.  Every five good things that happen to a person, one negative thing can wipe out any positive factors.

Since everyone pays much closer attention to negative news than positive.  Guess which one the media tends to run more?  Negative, by a landslide.  The news networks also go out, and give a microphone to the biggest blowhards and doomsayers they can find.  None bigger than Marc Faber, the author of the highly read Gloom, Boom & Doom Report.  His nickname is Dr. Doom in the press.

Now I’m sure Faber has some real complicated and well thought out investment strategy for his clients.  I’m also pretty sure he’s smarter than me.  He’s on CNBC constantly, and also Bloomberg.  He probably manages more money than I will see in five lifetimes.  However, for all his prowess and smarts I can sum up his investment thesis in one sentence.  The whole world is terrible and you should be terrified, also your house is on fire!

Faber is what we call a Perma-Bear, he never has anything positive to say and the market is always going down.  The market is being manipulated, or is rigged and the whole world except for him is in on it.  His really only achievement, in my mind, is he figured out a long time ago a marketing campaign that works, fear sells.  Why get up on TV and say the world is fine today and you can relax?  When you can cast death, and destruction across the investing landscape pretty easily.  It doesn’t matter that he’s wrong 99.9% of the time either.  He keeps getting TV gigs, as well as continuing to receive avenues to say whatever is plaguing the world that day.

This isn’t to say the world is perfect either.  Having some pessimism when it comes to investing ideas is healthy, but it shouldn’t be all encompassing.  The damage done to your average investor by these types of guys is insurmountable, and sometimes unrecoverable.  Scaring people within an inch of their lives, letting them continue to spew their negativity and rewarding them with more airtime is just wrong.  Having people throw all their wealth into hedges, and products that somehow counter the end of the world is also criminal.

Investing in anything is a sign that you are an optimist.  It shows that you are planning for a new day to come, and that your family will continue to prosper.  The whole point of investing is that you are planning for some type of long term goal.  Don’t let negativity derail you from that, and don’t let the talking heads gets you down.  The sun will still rise tomorrow.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations of any particular security, strategy or investment product for any individuals. Information contained herein has been obtained from sources believed to be reliable but not guaranteed. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

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