Going over the news every morning, we start with our emails and then work our way through the headlines. This morning, just a comment on the headlines from news sources – be careful how you react and do some checking yourself!
This summer we had a couple of college interns (Jazmin and Philip) work with us. They wanted to learn a part of the financial industry and get some work experience. This was not a lesson in getting coffee, making copies and filing reports. Jazmin and Philip are the kind of people that make us excited about the future. No job was too small and no job was too big. They learned fast and completed tasks faster. Sounds like a summer blockbuster movie: Fast and Faster Furious X.
Many days we started talking about the news and how to “drink from the fire hose.” Sifting through all the news also called the noise and the misinformation takes time. We stressed how important it is to have a filtering system as the media was first interested in grabbing eyeballs and clicks than real news. During earnings seasons, the noise rivals the loudest Who concert (The Who was notorious for taking it up a notch).
On July 19th, a big day for earnings, one headline on a major news feed read, “Google Pummeled After Earnings.” Really? Sure GOOG was down -4% at the low and ended -2% on the day, but MSFT also reported the previous evening and was down -12% at the low and -11% on the day. MSFT might be yesterday’s tech name and is smaller (only because of the loss that day), but it still garners $272B in market cap. We thought the headline should have read, “MSFT Got Taken Behind the Woodshed and Pummeled After Earnings.” Note to the wise: be careful what you read and do a little self checking.
Today, MarketWatch has a story: “U.S. stock market poised for weekly drop.” Sure the market is hovering around 1,694 vs. last Friday’s close on the S&P 500 of 1,706, so the headline is accurate, but down -70 bps is not a drop, it is more like a tick. Headline for today should read: “Markets consolidate recent gains, have a great weekend.”