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Lose the Wall Street Research MSMedia Blogs

Wednesday, August 20, 2008 | 08:00 PM

in Apprenticed Investor | Financial Press | Psychology/Sentiment | Weblogs

Sometimes, these things just all come together at once:

The other day, someone sent me this rant by Scott Ritter (video below). Ritter goes off on a tear, but he makes some valid points. Note the crowd's response not to his criticism of Bush or Congress, but if the media (I find placing so much blame on the press a little weird).

Then this evening, I see an interesting rant by Felix Salmon, Blogonomics: What CFAs Read, referencing another article: Blogs Slow to Influence Financial Advisors. Felix was not than enthralled with the CFA article.

I want to suggest another, perhaps more insightful approach.

The article in question is somewhat mixed in its criticism of blogs -- but it has the sort of common sense bromides that can be applied to almost anything about investing. Like CEOs, or Wall Street research, or the mainstream media -- anything some people accept mindlessly.

Indeed, you can rewrite the article: Anywhere you see the word "Blog" substitute the words "Wall Street Research" or "Corporate CEOs" "Business Press" or "Mainstream Media." The end result is nearly the same.

Here's my rewrites (in italics):

“I don’t want to leave the impression that I would invest a client’s money based on a tip from a Wall Street Research.”

“Many who write articles in the Business Press are not professionals, most are not even licensed to render financial advice.”

"Russ Thornton of Thornton Wealth Management looks to the Mainstream Media for good “talking points” from investors whose investment strategy is similar to his. 'It helps to see how others communicate and share investment concepts so I can become a better communicator myself.' "

"Some Corporate CEOs may offer useful information, but even their fans believe you should approach them skeptically."

Hey, that's pretty sharp stuff!

The article appears to be about blogs, but its really about critical reading and independent thinking. At least, that's my take. Note we previously discussed similar issues in Lose the News . . .

Previously:
Lose the News (June 2005)
http://bigpicture.typepad.com/comments/2005/06/apprenticed_inv_1.html

Who Do You Trust? (January 2008)
http://bigpicture.typepad.com/comments/2008/01/who-do-you-trus.html

Source:
Investment Strategy Blogs Slow to Influence Financial Advisors
Susan B. Weiner, CFA
Advisor Persepctives, August 19, 2008
http://www.advisorperspectives.com/newsletters08/Investment_Strategy_Blogs_Slow_to_Influence_Financial_Advisors.html