We learn in Game Change that John Edwards rose to serious presidential candidate with a pregnant mistress. He was running as a devoted family man. In this same book we learn that John McCain’s staff legitimately wondered if Sarah Palin was psychologically stable, yet she was the VP selection for the Rs. Everyday trading gurus go on TV and make calls about the market. How do we know if these people are legitimate?
Last year we were approached by a middle-aged, handsome, articulate, in his words “experienced options trader”. He was interested in our virtual training, expressing his desire to learn another product. A day into the program he shot us a long email detailing some overnight hardship that had befallen him, and asked for a refund for our training. I noticed that he had visited an awful lot of our training pages in this one day span. Strange. We extended his time to finish our program.
A few months later I stumbled across a website by this same gentleman. He was hawking equity trader training. He had a video of himself on a major financial news network being interviewed about his coaching excellence. If you didn’t know this background you might conclude after watching his TV appearance that he was a smart, handsome, insightful trading guru.
I have now traded for a very long period of time. I know many of the people who go on national finance TV or know someone who knows them well. There is a character (trader would be an inaccurate description) on a major financial network who gives advise about equity trading DAILY who in private brags he has never traded equities. And this person is paid by this leading network for his appearances. He is the John Edwards of financial talking heads.
And yet on StockTwits I can follow every trade someone like John Welsh PhD makes. I can get SMB’s best AM call of the day. I can watch Brian Shannon give me real time analysis of the S&P and know he will be using those levels for his personal account. In the blogosphere I can learn what Jeff Miller is thinking about the latest jobs number or Mish or Ritholtz.
None of the above garner the interest that a talking head does on TV so is the financial media wholly to blame? But then again should a CNBC or Fox Financial or Bloomberg measure themselves by ratings? Maybe a ratings measurement is only appropriate for entertainment and financial media is too important to be considered entertainment. A person’s retirement and savings is too important to be left to a ratings number.
A powerful literary agent reached out to me recently about my writing career. This agent mapped a plan for me to become a talking head, with her help, to sell more trading books in the future. My response, “I do not think the financial media would be interested in my content. It takes me five minutes to properly describe a trading idea. And this is after I have time to work on my conciseness.” Also I haven’t had hair for the last 12 years 🙂
Maybe the future is individual commentators and traders developing a small loyal band of followers. These individuals have their genius and stick to this. For example, they do not make long term market calls if this is not their thing. They are who they are and accept their limited genius. They do not step outside their expertise to bring in a wider audience of followers. There will be respected networks that still work to ensure these individual are legitimate as best they can. Perhaps the future financial media model will look like this: many more “gurus”, with much smaller audiences, making much less money, offering much more awesome content to followers who derive substantial value. Maybe that is the best and worst of what financial media can be.