Cheaters in CNBC's stock-picking game? What a Hoot!

I think it is beautifully ironic. Sublime in its own way.

Just for fun, there was a stock-picking "paper portfolio" contest in my class in investments (the CFP curriculum class to prepare for the CFP comprehensive exam,) a few years ago. Being the serious fellow I am, I asked the instructor if the contest wasn't an exercise in bad investing, and would it encourage the class to engage in bad investing? He indulgently and patiently assured me that it was just for fun.

As it happens, my wife happened to see a promo for the recent contest on CNBC with its million-dollar prize, and asked me why I hadn't entered. My answer was the same as before. Even though it is all in fun (I thought,) it still, if I won, would send the wrong message about investing and about me. It is not about utterly disregarding risk in search of maximal short-term gains. Well, what it did was worse -- it lured in some (alleged) out-and-out stock manipulators.


CNBC Calls In a Judge

WSJ (subscription) "A Cool Million No Longer Buys You a Luxe Retirement"

Yes it's old news, in a sense, but don't give up!

If you are young, a few simple actions will make your future much more comfortable. Use your opportunities for tax-deferred investing. Put enough into your 401(k) to get any available employer match. Contribute to your IRAs, both traditional and spousal.

Go beyond tax-deferred. If you can, put something, say, one hundred dollars a month away, for the very long haul, not to buy a flat-panel TV. To get started, put the money in a savings account. Then, when practical, in a taxable brokerage account. Learn how to invest the taxable account money for the long haul, not the fast buck, not as "mad money", and in a tax-efficient way.

Avoid becoming financial-services road-kill. Avoid load funds like the plague. Like the plague. No-load mutual fund accounts, at the fund, are one good way. Companies such as Vanguard and T. Rowe Price are known for low expenses and good investor-friendly values. That's not a commercial, just the truth. I'd suggest avoiding the mutual fund companies which advertise over and over all the day long on CNBC and Bloomberg. Big ad budgets are paid for in high expense ratios! You want financial service pros whose highest priority is good client outcomes, not client-gathering marketing. Never go to an investment "seminar" even to get the free meal. It will really, really cost you. Don't invest through variable life or variable annuities, they're usually heavily-commissioned, "fee and expense you to death", poorly-performing, all around sorry deals. As you might have guessed, I don't like them much. Stir well, wait patiently while it simmers for twenty-five or thirty years, and voila! Magnifique! If at some point along the way you want a financial advisor, find one with low fees who doesn't sell commissioned investment junk products, and emphazises good fiduciary standards.


Getting Going - WSJ.com

Long-Term Investing Keeps Its Old-Fashioned Shine: Chet Currier, of Bloomberg News

One of the biggest problems with all of the financial media is the dysfunctional short-term fixation reflected in a huge percentage of the words written. This article is an exception. Kudos to Mr. Currier and Bloomberg for it.

Short-term thinking will get you taxed more heavily, subjected to huge risks that, remarkably, get smaller with a longer-term focus, and generally affected by numerous other problems such as performance-chasing, etc. Read the article. He's correct, as I see it. Don't know how to invest with a long term focus? Don't feel bad. CNBC and all the other financial MSM is just not about doing that. Exceptions exist, but you have to search them out. Like maybe this blog. At least that's my hope.



Bloomberg.com: Opinion

Amen, sister: Caroline Baum's Bloomberg article: Stock Market Slide Spawns Tales From the Crypt

Some people have the ability to discern foolishness when they hear it. Ms. Baum has a few choice words to say about media commentary on the markets this week.


Bloomberg.com: Opinion

Fox Business Network details begin to Come out

Well, the rumors were right. The more, the better. Iron sharpens iron, maybe even in TV.

Forbes: br/>Fox Launching Business Network - Forbes.com

Slate weighs in, albeit somewhat sourly: "Fair and Balanced ..."

And FoxNews.com has a few words to say...here.

More of Henry Blodget's book in Slate - He Calls Jim Cramer 'that Crazy Man'

I wrote a post about the first two parts of Henry Blodget's book excerpts at Slate. The third is up, and in it he devotes quite a few words to Jim Cramer and his show on CNBC, Mad Money. His stats on Cramer's stock picks are more current than I have previously encountered, and it's not pretty. A few thoughts first.

When Kudlow and Cramer was on CNBC I thought it was the best thing going. Those two counterbalanced each other nicely. I guess you could say that with their show the total was more than the sum of the parts. It's gone but not forgotten. I would say that Jim is jumping the proverbial shark nightly for CNBC, and they have not had much success otherwise with their evening programming. Now don't anyone tell him I said that, or he really will jump a shark on the show, and that could be the end.

A fellow I met some time ago would short Cramer's stock picks right as he made them in after-hours trading. He was not down on Cramer at all, but he believed that people were buying Cramer's picks willy-nilly as he made them without doing any personal research, and his thesis was that many of Cramer's picks went up, down, and then back up again. Thus the short sales. I have read Cramer's book Confessions of a Street Addict and really enjoyed it and learned a little bit about the mindset of a trader, that trading as they do it seems to be mostly about outgaming the other traders, not even remotely about investing, as Ben Graham defined it, or about fundamental or technical analysis. It was, in a word, surreal, and just not rational. One thing I will say about Jim Cramer is that he can really write. I think I would like him if I knew him personally, but that we would agree on very little.



Why you should never take Jim Cramer seriously. - By Henry Blodget - Slate Magazine