Jon Stewart vs. Jim Cramer & CNBC – my views on it

For those of you aware of the current CNBC vs. Stewart of the Daily Show debate I would like to point a few things which I think people need to be aware of. Stewart, I believe, was very short sighted in his views. While I do think CNBC could provide more “trading education” instead of simply opinion, we must remember they are news network. So to keep this brief I am going to point out a few things in point form:

• All news networks have a bias because they rely on a certain type of audience. The station has to make money and the only way they stay on the air is if they tow a certain line. If you don’t like what is being presented, don’t watch the station. But don’t plead ignorance.

• I realize not everyone is able to tell when financial news is biased because they are not educated in this area.Well, I must say that finance is not for everyone.The stock market, even the housing market, is not for everyone.You don’t sit down at a high stakes poker game betting your entire financial future on a few hands do you?Then why do you think the financial markets would be any different?The players in the financial markets have spent their lives figuring out how to make money.While people who make money in the markets come and go, there is generally one common theme – the people uneducated in the market lose money.

The market is not even a zero sum game, it is negative sum game. Meaning you lose more than you actually lost on a trade, and profit less than the actual profit you made on a trade. This is because no matter what you paying commissions, or fees or spreads regardless of if you make a profit or lose. And every time someone makes money, another person has lost or has given up an opportunity to make a profit.

Stewart failed to realize this. The masses will almost always loss, in boom and bust cycles. Why? Because it was the masses that pushed prices up so high (and then low)! This is from poorly educating oneself on the dynamics of the market they are entering.

• We all have biases based on self interest, unfortunately that same bias has created multi-billion dollar industries which tout that you don’t need to know anything “Just give us your money and we will make you a return for a small fee.” Some people do get lucky and make money, but many more do not. The market changes and the paper profits that were there disappear. The smart ones get out with their money.

• The markets are constantly changing and no one knows where prices are going to go. Good traders don’t necessarily make money off of predicting market moves. Rather they adapt to current conditions and control risk. CNBC almost always has different opinions from the analysts they have on. One is bullish, one is bearish. So it is the investor who decided which analyst’s advice to follow. Which brings up another point – be your own analyst. Don’t try to get into the biggest game in town for free. If you really want to have an idea of what is going in you need to educate yourself and put yourself in the game. Take a bit of the money you were going to invest and buy products or get a quick education that will at least put you slightly ahead of the masses in terms of your market knowledge.

• Watching the news is not educating your self. The markets are dynamic and no one will ever make consistent money off of listening to opinions. You need a plan for the markets. Getting mad at CNBC will not do anything for your portfolio. Getting yourself educated will. Spend less time watching the news, which is not even required to make money in the markets, and spend that time actually learning to trade.

• I love Stewart and Colbert. They are fantastic entertainment, as are some of the shows on CNBC. It is something to watch which gives you a gauge of the market, but it should not be relied upon for trading decisions. Only you are responsible for your trading decisions. And if you lack the knowledge to take responsibility for your actions, don’t get involved in the markets – any market you are unfamiliar with.

• To me this all comes down to people not taking responsibility for their own actions. I am not going to punish the drug dealer for putting a pill in front of me…it is my choice if I take it, not his!

BEING IN, AND MAKING MONEY IN THE MARKETS IS BASED ON HARD WORK AND COMMITMENT, BUT IT IS NOT A RIGHT!!!  The market owes you nothing, if you believe that it does, you have fooled yourself.  It is you who owes it to yourself to find out what you can and educate yourself on how the markets actually operate.

Were mistakes made, and are their problems with the financial system? Most definitely, but for you who originally simply wanted to make money off this F’ed up system, then that is what you should focus on. Profits will never occur without losses. We must accept losses in order to achieve profits. Realize that through losses is where profit arise.

Please note:  My heart does go out to those who lost homes or are in danger of losing their home and who were not trying to make a profit or flip a house or anything like that, but simply needed a home to live in.  There are victims in this debacle, and it is unfortunate.  Although there are many who are not victims at all, but were 100% willing participants (while they were still expecting profits, but then they portrayed themselves as victims once losses occurred).  But starting fights is not going to solve anything.  It is up to each of us to change and be responsible for our own actions.  It is only through this that you will create the personal world in which you want to live.

Through personal accountability the world will change and we will change if we need to.  And through this even if the world does change for the worse (because others don’t take accountability for their actions), it won’t drag us down with it.

~Cory Mitchell