In a blog post today, Doug Kass rebukes the financial media for voicing their partisan political views. “To biased business commentators”, Doug writes, “who seem to think viewers are interested in their political positions (and who often even try to educate us), I have one bit of advice in the months ahead leading up to the November elections: Report, don’t coach!” The full post is here: Why I Will Never Comment on Politics.
Anyone who’s been watching cable news–whether financial or traditional–over the recent past is well aware that many of the media outlets have begun to take sides in the political debate. This way, the station (or newspaper) can appeal to its base with controversial and extreme views. I suppose stirring these emotions translates into some kind of benefit to current or projected ratings.
For the most part, I’m not personally bothered by this trend when it comes to reporting traditional news. However, when it comes to financial news, I couldn’t agree more with Doug Kass. There simply is no place for it. In fact, I find it dangerous and an irresponsible. Financial markets don’t care about emotions. They barely care about politics. Yes, of course, political decisions do act as an input into the complicated formula that drives the price of stocks and bonds, but is just one input of many. There are too many important macro- and microeconomic factors that won’t be greatly impacted by which party gets elected into office.
As an investor it’s crucial to remain politically agnostic. I’ve seen too many investors driven out of markets based on political ideology. It certainly doesn’t help when viewer’s emotions are constantly raised through the barrage of partisan opinions expressed on the financial news networks. Even temperament, not emotional attachment, is a necessary skill to successful investment management. As investors figure this out, they will tune off this type of media.