July 23rd, 2008

I Finally Turned Off CNBC

I finally did it, I turned off CNBC during the day. Rational decision making is tough enough to bring on confusion, anxiety and excitement. What I don’t need is a bunch of “sales types” pitching me in the form of “news” whatever they’re trying to sell at the moment for their own purposes. And those Headlines Newsbreaks aren’t really news or worthy of being a headline since within 30 minutes the market will return to whatever it was doing before that news broke.

Watching CNBC might be O.K. when your running on a treadmill in the gym but it just scrabbles the brain when your trying to manage money, making buy and sell decisions. Yes, it’s acceptible (actually preferable since it helps you avoid the commercials each of which has to be repeated, I swear, at least 6 times each hour) if you want to have it running muted if you want to stay current on what the overall market direction. But you can also get the general trend just by periodically clicking back to the Market Indexes watchlist on your real-time online brokers trading platform (I use Fidelity’s Active Trader Pro, by the way).

As I’ve frequently written here, significant portions of my portfolio are in the precious metals ETFs and several of the double short ETFs which makes days like today very stressful. Here’s what SLV (the silver ETF) has done so far today (as of 1:22 p.m.) as an example:

The market clearly doesn’t know what’s going on or there would be some sort of direction rather than a 3.2% volatility between day’s high and low so far. Trying to keep you focus on the bigger picture and longer-term horizon is nearly impossible with CNBC blaring in the back ground trotting out experts between 10:00 and 10:30 that the market has surely made a bottom because of the spectacular moves of the financials and then for the rest of the day saying that oil inventories have risen at a time when they should be falling underscoring that we’ve all cut back on our driving due to the soft economy, the high price of gas, and that there were more than 50% fewer Hummer sold this year.

The CNBC mission is to satisfy the world’s craving (I didn’t write “everyone’s craving”) for “news” (like Fannie and Freddie’s huge and surprising price recovery of nearly 100% in less than two weeks) so they’re not going to be providing you any information that will help you solve your dilemmas. In short, part of CNBC’s challenge is to appeal both to “traders” and to “investors”; the former may react to news, the latter doesn’t.

So turn it off 0r, at the least, mute it. Toggle between your trading platform, a charting service or website and the letter, book, recipe your writing or researching (or install dual monitors as I did …. it’s great). There will be less of a chance of your getting whipsawed, reacting to every piece of “news” and making bad decisions.

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