Jeff Feldman wrote this letter to the editor of the New York Times in response to an article in entitled, CNBC Thrives as Hosts Deliver News With Attitude.
The editors chose not to print the letter, so here it is:
Unfortunately, CNBC delivers more than news with attitude. It delivers analysis with bias. And it delivers that analysis incessantly in real time. I have been on Wall Street for 40 years and was there in the late 1970’s when we went through a period as difficult as this one. If you wanted business news back then, you had to work for it. There was almost none on television, nothing more than stock prices on the radio, and most newspapers did not have a business section. The business magazines provided information that was weeks old by the time they hit the newsstands. I was an analyst at the time, which meant I was analyzing what had happened (generally six months earler because of the lag of data) -- not prognosticating what was about to happen. Contrast that with CNBC’s real time analysis and the pundits constantly telling us what will happen next. The problem is that investing is not a collegial activity -- it is a competition! If too many people act on a prediction, the prediction is less likely to come true. If too many people engage in the same strategy or take the same side of a trade (see the last 5 years), it can’t possibly work.
As to Jim Cramer, some of what he does is truly educational. He should stop there and not make stock recommendations. The height of absurdity is his “Lightning Round” in which callers throw out a stock name and he opines on it. He prefaces the round by explaining that he has no advance knowledge of the callers or the stocks they choose. This is represented as preferable to the alternative, where he would know the stocks in advance and have time to research them and provide true insight. He also might know something about the caller so as to determine if the investment is suitable. Can you imagine a doctor giving medical advice the same way? “ I have no advance knowledge of the caller or the ailment. Let’s go to Joan in Indiana. What ails you Joan?” Would anybody accept medical advice in this way? Do we want to go back to the days of medicine shows and Wolcott's Instant Pain Annihilator?
Is money any less valuable or important than health?
The banks and the mortgage brokers have been called out for being irresponsible for putting their interests ahead of and in conflict with the marketplace. The same is true of CNBC.
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