Business Channels – Information of the Businesses in the Market

by Ankit Jaiswal on Fundamental Analysis

I went to my uncle’s house during puja. One morning I woke up, I found my Uncle with a bunch of business newspapers and sitting in front of business news channel. He is a businessman and also invests in equity market on a regular basis.

On being asked, why is he so concerned about the market moves on a daily basis when he is investing for long term, he replied that he has invested a lump sum money in the market and so he is looking
after the news and listening to the TV analyst’s view on his invested stocks. This is the problem with a lot of people and they have a habit of looking at stock ticker every now and then, though they are not a short term trader.

I personally have stopped reading newspapers and watching business channels due to a number of reasons. Firstly they decide for us what we should pay attention to and what we should ignore. I know many people who reads newspaper very selectively including first two-three pages. Secondly, since the news is already shared with a millions of readers actually gives you no real advantage over others and thirdly investing is all about anticipating a future course of action while these newspapers deliver what has already happened in the past which is hardly of any relevance.

Nassim Taleb wrote in ‘The Black Swan”-

Public information can be useless, particularly to a businessman, since prices can already include all such information, and news shared with millions gives you no real advantage. Odds are that one or more of the hundreds of millions of other readers of such information will already have bought the security, thus pushing up the price. I then completely gave up reading newspapers and watching television, which freed up a considerable amount of time (say one hour or more per day, enough time to read more than a hundred additional books per year, which after a couple of decades, starts mounting)

Instead of reading newspapers or watching television, just create a google alert on businesses you track which will deliver you a lot stuffs to gains important news regarding your company and read the news only if you feel it has a long term impact.

Andrew Ross said-

the smallest bookstore still contains more ideas of worth than have been presented in the entire history of television

The time which you devote in reading newspapers and watching news channels is really of no use and rather we can utilise those time to expand our mind by reading good books or blogs so gain insights from the financial heros like Warren Buffett , Charlie Munger, Howard Marks, etc who are storehouse of worldly wisdom. Moreover you can read interviews of entrepreneurs about their business and their journey, see videos at ‘talks at google’,read business magazines and unlimited good reading stuff on internet.

Professor Sanjay Bakshi said-

I rank news beneath books. News stories often relate to things that are temporary and relatively unimportant whereas good books  teach you about things that are long-term and important

Innovation and creativity doesn’t come from quickly glancing the news at ET or your Twitter feed. It is a slow and steady process which comes from voraciously reading books especially the long ones which requires focused attention.

Taleb wrote in ‘Fooled by Randomness’-

minimum exposure to the media should be a guiding principle for someone involved in decision making under uncertainty including all participant in the financial market

I totally agree with Taleb on this because I personally believe that whatever reported in financial media is simply noise rather than information. Have you ever seen any journalist keeping silence? What most of the people don’t understand is that they are getting paid to grab your attention. Moreover, one big problem with the news is that you do not have any credibility and competence of the person who created the news.

I know quite a number of investors who reads nothing apart from newspaper. They are so engrossed in newspaper and news channels that they are hardly left with any time to devote towards good books or blogs. However, a study shows that an average Indian read a lot more than an average American or Chinese.

Thus I would suggest everyone to start with good books, blogs, letters of CEO, autobiographies, magazines, podcasts, videos etc which would help you in gaining worldly wisdom and this is not only going to help you in investing but in your personal life as well.

There’s a famous quote by Charlie Munger who said-

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up  and boy does that help, particularly when you have a long run ahead of you

I don’t have anything else to say.

Take care and keep learning!!


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2 comments

  • Yeah, I totally agree with your view….I personally have end up selling a number of stocks by depending on the news channels and later regretted a lot.

  • I personally have stopped watching business channels since a long time. I have set google alert for the stocks which are there in my portfolio so that I am informed about the news. You should rather spend your time reading good books and blogs.

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