Financial News Shows: Follow the Money

I just finished watching my DVR'd version of Jon Stewart's interview of Jim Cramer.  Below is Part 1, at www.thedailyshow.com you can see parts 2 and 3.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

There has been a lot of outrage over the "financial news" shows and the negative impact they have on personal investing and thus our economy in general.  I agree that they can have a negative impact ultimately on our economy, but only because people don't keep the proper perspective on them.  Many people have been trying to stress how Jim Cramer is not a market professional, but rather an entertainer.  I agree.  He used to be a market professional but now he is definitely an entertainer.  As are all the others.

In a karmic connection to one of the most important real news pieces in American history, Deep Throat's famous advice to Bob Woodward is spot-on for this issue: Follow the money.  Anybody who thinks the financial news shows are about providing real financial advice has been led astray.  Financial news shows are about SELLING ADVERTISING.  That is how they make their money; follow the money!  They are going to air content that attracts an audience that they can sell advertising against.  Period. It's not about airing content that helps people be better investors.  That is not their business, nor should it be.  It's a TV show, not a financial advisory firm.

I'm not saying they shouldn't exist or what they do is wrong.  Not at all.  I actually know Jim Cramer from when we invested in TheStreet.com when I was at Flatiron and think he's a great guy and have nothing at all bad to say about him.  My only issue with these shows is that there should be a *real* disclaimer.  The guests they have on the show all do disclaimers of their investment holdings, but that's not the issue.  The shows should be forced to air a disclaimer at the beginning of each episode such as:

"We are an ad-supported TV show, not a financial advisory firm.  We air market commentary and investment recommendations for the sole purpose of attracting an audience to sell advertising against. (We hope you enjoy the show!)"

Sometimes good market commentary and sound investment advice serve the purpose of attracting an audience, but that is purely a byproduct.  The product that they sell to advertisers is the size and composition of their audience, and everything they do on the show is done to optimize that product.