Stephen Gilbert: ‘Your reader’s response to the Borowitz Report quote shows how acceptance of the increasingly incredible behavior of our ‘leaders’ makes satire a risky business. I wonder what you’d have to say about Bush/Cheney for it to be clearly untrue.’

Dan Albro: ‘I wasn’t upset with your inclusion of the Borowitz report article about how the administration is blowing off Hussein’s acceptance of UN weapons inspectors until the next day when I opened the newspaper and discovered that everything it said was true.’


Gary Brown: ‘If you use the ‘search’ box on the Washington Post main page, instead of the ‘archives’ link, you can find the past two weeks worth of articles free. Here’s the link to the article you mentioned yesterday.’

☞ You’re absolutely right, of course. It did seem odd they’d be so Draconian. Thanks.


Ron Paul, Republican Congressman from Texas, in the House of Representatives, September 10, 2002: ‘Mr. Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve . . . Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy.’

☞ Just what we need.


Chip Ellis: ‘Fresh anchovies are not salty and they are delicious!’


Jay Glynn: ‘Anchovies come from Sardinia. Everyone knows that.’

☞ Sure. But where does Sardinia come from?


Item 34: A Critique Of CNBC

Many of you spend time watching CNBC. It has almost become a national pastime. It appears on the computer screens of stockbrokers so the customer won’t know more than the salesman. Because it’s a financial news show, the emphasis is on immediacy, the breaking story, the very latest news and opinion. The focus is short-term, which makes it an indispensable tool for the trader. But it is the long-term approach that serves us best as investors. This sets up a conflict of interest. Holding on to stocks for the long term may be difficult emotionally when exposed to a continuous barrage of news and opinion. Ask any broker how many times agitated customers call to sell solid, long-term positions after hearing unsettling news on television, news that can cause a sudden, dramatic move, with the stock symbol painting the tape, but news that is likely to end up no more than a blip on a long term chart. Television’s obsession with analyzing and dissecting the mostly meaningless news minutia of the day hampers our ability to see the big picture. Its up-close focus is incompatible with the broad perspective needed by the long-term investor.

How do we as viewers deal with the fact that CNBC’s non-stop, fast-paced, play-by-play format with engaging on-air personalities, energizing music and slick graphics produces an entertaining, financial variety show that makes for good television but does not make for good investing? We deal with this by being aware of what matters and what doesn’t matter. Although they are rarely mentioned in CNBC’s breathless, Walter Winchell, ‘tout TV’ type format, it is important that we put news and opinions within the context of the long term, over-riding directional influences on the market. Influences such as the likelihood that deeply entrenched trends in stocks or the over-all market are likely to persist; influences such as the likelihood that the market will travel deliberately down the path it must take to satisfy its internal needs. These needs might include correcting previous excesses or correcting current valuations or anticipating a stronger or weaker than expected economy, needs that take time to play out. During that time, the ‘news’ may or may not conflict with the market’s agenda but the latter will prevail. An awareness of these long term influences enables us to put in better perspective the news that XYZ company reported quarterly earnings one penny more than expected.

Yes, CNBC does lots of good things. It helps investors by teaching, by informing and by entertaining with extremely capable, articulate and personable reporters. My own view, however, is that the long term investor interested only in making money, and I repeat, interested only in making money, would make more of it by sticking to a strategy of buying quality, seasoned, industry-leader type stocks or top rated mutual funds or index funds – all at reasonable prices and then keeping his television set at a distance and using his broker sparingly. Such self-imposed isolation would avoid all kinds of emotional wear and tear and remove a major risk of being sidetracked from achieving long-term goals. Investors using a broker would give instructions not to call except when pre-determined price levels were reached (both on the upside and downside) or when news occurred that the broker felt represented basic change with long term significance. Being informed by mail would be preferable since it gives the dust a chance to settle and since only time puts news in perspective.

Of course, none of this advice is practical. It’s not going to happen. The investor will always want to know what’s going on with his money. He is not going to recuse himself from his TV or his broker or the Internet, nor should he – since these are all aspects of investing that make the pursuit of profit more pleasurable. And, for many investors, brokers play a key role. We need them; the best ones are invaluable. So the way to deal with the never-ending deluge of investment information is to try and scotch guard your emotions and observe with detachment. Develop your ability to separate the wheat from the chaff, to tune out the static and increase your filtering skills.

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