Why journalists shouldn’t be taken seriously
Posted on April 24, 2007 by Richard Beddard
Filed Under Investing |
Salutory post from Maoxian: Why technical analysts shouldn’t be taken seriously
Actually he gives one example of a technical analyst talking mumbo-jumbo and a number of examples of loose thinking on the part of the journalist who reported it. There must be an old market saying along the lines of “don’t take anyone too seriously”. I can’t think of it right now, but it would apply to bloggers too. Of course, the mother of all stock market sayings covers it: “Do Your Own Research”.
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4 Responses to “Why journalists shouldn’t be taken seriously”
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There is a lot of sloppy journalism around. I even have a special category for attacking it on my blog.
I find that in any area in which I have significant knowledge (investment, IT, etc.), the (non-specialist) media keep making major mistakes.
As for technical analysts, I am not even going to start on what I think of them.
Well I agree really, even though I am a journalist! Although actually I think it’s often sloppy analysis - the boundary between reporting and interpreting is often rather fuzzy and journalists get caught making assumptions they wouldn’t make if they were doing a straight reporting job.
As for technical analysis. If you asked me do I use it, I’d say no. If you asked me do charts ever influence my investing decisions I’d have to admit, sometimes they do. If I’m buying a recovery share, I like to see heavy price declines in the not too distant past. If I’m buying a growth share I expect to see a consistent up-trend in the price chart.
Technical analysis looks a lot like astrology to me.
There seems to be something in it , but goodness knows what it could be.
I once met David Charters, who wrote an excellent book about charting now sadly out of print, and headed up an investment research firm. The founder of the company had made a fortune trading (I think) a silver bubble many years ago using TA exclusively. Charters himself was an impressive man. And had grown up plotting the charts himself on paper every day. Every time I’m tempted to dismiss charting out of hand I think of him and put it back into the pile of things I intend to take a look at again one day.
I doubt I will though, because chart patterns just don’t fascinate me unless I link them to fundamentals. Even if they are predictive, they don’t tell you anything about business, or why a company does well. And I always want to know why!