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CHAPTER 4

about various types of stocks, mutual funds, bonds, and other invest- ments. They always have the running stock ticker going across the bottom of the screen so that investors can see what trades have gone through and at what price. They also do a good job at having analysts from different companies come on to discuss the current state of the markets. In that sense, they are a fine source of information.

However, there are also negative aspects of relying on television for your information. Until recently, stock analysts didn’t have to dis- close which stocks they held individually. This meant, for example, that Joe Smith from the XYZ Firm could go on television and tell people that the Fly By Night Corporation was a good buy without telling those same viewers that he owned stock in that company. The- oretically, analysts could give out any information they wanted to without publicly acknowledging what their personal positions were in the stocks they were talking about. For the public, that posed somewhat of a danger. How are average investors to know whether the information they are hearing is truly accurate? While I’m not say- ing that this is the fault of the financial television networks, it is something that investors should behold with caution.

One more thing about relying solely on networks for financial information: Do you ever think that instead of just reporting the news, they want to try and shape it? It seems that I am constantly see- ing the financial networks tout some upcoming warning about prof- its or earnings from companies. When you see these, do they affect the way you look at your portfolio? If one of the companies that you are invested in issues a profit warning, do you consider selling? Gen- erally, after a company issues this type of warning, there is a sell-off by investors of that company’s stock. The networks then report that, too. Yes, it is their job to report what companies are doing and how they are doing, but sometimes it seems like they are overemphasizing what is really going on, all for the sake of reporting something else later.

As a rule, I recommend that my clients, and others, not rely solely on financial networks for all their financial information. Today, there are so many different places to get information. To ignore these out- lets in favor of just watching television is doing a disservice to your- self and your portfolio. If you like watching these stations and think

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