Translated: “What is Truth?” The financial (and other) media has many ways to tilt its reporting of news. Whether it is due to the selection, frequency, or framing of stories, the media has a choke hold on how consensus views get formulated by the consuming public. The CFA institute (of which I am a member) published an article titled, “How to Read Financial News Redux: Understanding Consensus” by Robert J. Martorana, CFA (https://blogs.cfainstitute.org/investor/2019/07/22/how-to-read-financial-news-redux-understand-the-consensus/) that highlights some of the issues to consider when reading financial news.
The author highlights the main ways he reads the news and makes informed decisions to get his version of “truth”. First, he reads a variety of general news sources, such as the New York Times, Wall Street Journal, and Google News. He then gets to the investment news from sites such as Dash of Insight, Fundamentalis, and Factset Insight, as well as pure investment research such as from the JP Morgan 2019 Long-Term Capital Market Assumptions.
The author looks at how each source covers the story, such as if it was a lead story with deep analysis or if it was buried somewhere with only a cursory overview. Also, if the story keeps recurring with updates, that news source obviously has some bias (legitimate or otherwise) to keep reporting on it; which could be different from a different news provider. Also, there is obviously a political bias in news reporting today; it is critical to “spot it quickly, read multiple viewpoints, and come to our own conclusions”.
As an investment professional, I am intrigued by how investment-related stories are covered by the mainstream media. Oftentimes, I hear or read a story that is blatantly wrong or mis-reported. The errors are obvious to me as an “investment professional”. Consequently, I wonder how many other stories I hear or read about that I am NOT an expert in that are mis-representing the facts. As a Chartered Financial Analyst (CFA), we need to do our due diligence as we prepare and implement investment plans and management. We need to ensure that our sources of information are fair, unbiased, and “truthful” so that we can faithfully serve our clients.