A Hard Lesson From Hurricane Dorian
This week’s slap goes out to the weathermen out there and the financial news media. Both are doing a horrible job.
Hurricane Dorian was the ninth hurricane that I’ve lived through and the most frustrating. The weather prognosticators originally said it wasn’t going to develop into anything, and we all know what happened to the Bahamas.
The most frustrating part of this one was that it wouldn’t move. That, not its winds or storm surge, was what was most concerning to me. Well, that and the way the television news covered it.
Right around the time it was hitting the Bahamas, everyone in our neighborhood was trying to decide whether to stay or to follow the mandatory evacuation order.
Mandatory evacuation doesn’t mean you have to leave. It means nobody’s going to come and get you if the worst happens. And I live two blocks from the beach, and at that moment, the news was telling us we were the dead center of the track. So this was the real deal.
We had a Category 5 hurricane 100 miles offshore. The weathermen had already been wrong about its strength and movement a half a dozen times. Now they were telling us it would move north, which it hadn’t done for two days. And the decisions in the neighborhood were almost 50-50 whether to stay or leave.
Here’s where this relates to money…
I was having a conversation with one of the people who has lived on our street the longest, and he said, “I’m staying – the TV weathermen are always wrong.”
I said to him, “That’s why I’m leaving. They’re calling for it to go north, and you’re right – they are always wrong.”
And if the weather prognosticators were just wrong, it would be one thing. But they are consistently wrong, and they blow these things so out of proportion it scares the hell out of everyone.
And that’s exactly what the financial news does as well.
The incredible volatility we’ve seen in this market for the last nine months has been driven, for the most part, by the horrible screaming heads who hammer on every bit of negative information and try to create as much panic as possible.
For every person who ignored the weathermen and stayed on our street – who turned out to be correct – there were just as many who loaded their cars with what they could on short notice, fought the traffic, sat in line at the gas stations, and waited out the storm in a motel or hotel inland staring at The Weather Channel.
Sound familiar? It’s no different with financial news except that it goes on every day in our homes.
Every little bit of negative information the financial media can find is slammed all over the news with the same results.
We don’t have to get in our cars or sit in a hotel somewhere. But we’re glued to the screen waiting for the next 2008-2009 to develop… All compliments of the financial media whose only job is to get you to stay in front of the tube so they can sell advertising space. Informing you has nothing to do with what their business is.
There is a lot of talk right now about the financial literacy crisis in this country, and a big part of the blame – not all, our schools share some of the blame, but a big part – rests on the shoulders of the financial news media.
If you haven’t been around long enough to know that what I’m telling you is absolutely true, here’s a little game you can play with yourself…
Start following the number and kind of negative news items the financial news media pushes and see what kind of effect it has on the markets. I guarantee you there will be a direct correlation between market volatility and the horrible, hypernegative coverage the money networks provide.
The best part of this situation is you’ll also see that the next day it’s all gone.
Poof! They’re on to the next end-of-the-world news story, and they’ll take no responsibility for the inaccuracy, the hype or the damage they have done to the markets.
The only solution I see is to turn off the TV and fall back on solid research and reliable news sources like The Wall Street Journal, Barron’s and The Oxford Club.
Or you can continue to be a victim of the English and journalism majors who parade around as talking heads as if they were market experts…
In case you hadn’t picked up on it, the complete absence of reliable information is one of my biggest gripes about the money business.
Turn off the TV. It’s a start.