One of the major unstated assumptions of most financial journalism is that the audience is comprised primarily of fund managers or long-term buy-and-hold investors. It is an understandable tendency as it makes it easier to tailor the news and stock coverage in a more specific way.
I'm not familiar with the demographics of financial TV views but I assume there is a large group of casual investors and a much smaller group of dedicated market players. Those dedicated individual traders have a tendency to make fun of most stock market coverage since it has so little application to what they actually do.
This bias toward a certain type of audience results in coverage primarily for traditional Wall Street types. The focus is on big cap well-known names like a General Electric (GE) or Coca-Cola (KO) that everyone knows and might be curious about.
A major consequence of the bias in coverage is that the best-performing stocks and biggest movers are given short shift. The biggest movers in the market on Thursday were some smaller biotechnology names like TG Therapeutics (TGTX) and Horizon Pharmaceuticals (HZNP) , but you would hardly know it given the coverage of names like Tesla (TSLA) and Kraft Heinz (KHC) instead. Rather than talk about things that are producing the best returns, we hear about the things that are the most familiar and best known.
Another bias of financial journalism is that it tends to assume that most viewers and readers are long-term fundamental investors. Everyone is an aspiring Warren Buffett that is trying to find value stocks that can be held for years.
That sort of focus makes coverage quite easy. An article or segment on what is going on with Kraft Heinz fills up plenty of space and it attracts some interest among the curious even if they don't' own the stock or have any interest in buying it. Who doesn't want to listen to the wisdom of the Oracle of Omaha?
One thing I have never seen on financial television is coverage of successful individual traders that are primarily managing their own account. I know a number of these traders that have produced consistent returns that are many multiples of those produced by the vast majority of hedge funds.
About the only time we see anything about exceptional individual traders is when we receive advertising from someone trying to sell a service. Real traders that produce exceptional returns are buried in the sea of hyperbole and sensationalism. As a result, the business media does not take any individual trader seriously.
Many successful individual traders turn into money managers which is a very different business. The assumption is that all good traders really want to be money managers which isn't true. Some of the skills of aggressively trading a smaller account will transfer to manage a big money portfolio but it requires some very different skills. Great traders stick with what they know and aren't frustrated money managers.
If I was running CNBC, Bloomberg or Fox Business, I would seek out accomplished individual traders that manage their own account and have been successful over many years. These are the people that can add some real insight for those of us that are trying to produce exceptional returns without the constraints of a mutual fund. The individual that produces 50% annual returns in his personal account uses a very different approach to the market that we seldom see covered by major business media.
The point here is that it is extremely important to have clarity of style. Traders get into trouble when they start acting like fund managers and vice versa. Good individual traders will produce returns far in excess of anything that traditional Wall Street will earn. You will hear very little about these folks that do that because it undermines what Wall Street is selling.
My goal in my writings on RealMoney.com is to celebrate the greatness of individual traders and to help people appreciate and learn about the opportunities that exist. We won't hear much about it in the business media and maybe that isn't a bad thing for those that are already doing it.
