I have to admit that I used to be a CNBC addict back when I was in college and just getting really interested in the stock market. I used to wake up at 6 AM and watch to see how Europe was doing as well as the S&P Futures. I loved watching Squawk Box with Joe Kernen, David Faber, and the late Mark Haines. But is it worthwhile?
I think I loved it because it was all new to me and my enthusiasm level was off the charts. I was like a sponge and learned a lot because my base level of knowledge was so low. However, it is a different story today. The more experienced I got with the markets, the less value I found in watching CNBC.
Cheerleaders
It is my impression that a lot of the anchors on CNBC are cheerleaders for the stock market. They love it when stocks go up and are solemn when they don’t. The obvious reason for this is because their ratings are much higher during bull markets and optimism keeps watchers tuned in. But is it good for your portfolio? I don’t think so.
Ideally, they would be even-tempered regardless of what the market was doing, but they are a business like any other so it is understandable. However, it is important that you as a viewer understand this and make sure not to let it affect your decision making as an investor or trader.
Missing The Big Picture
Another problem I have with CNBC is that it is so short-term oriented. Of course this is the nature of a business channel that broadcasts live while the market is open, but it tends to assign meaning to market activity, which in many cases is just noise. This can definitely have an adverse impact on your portfolio if you react to all the comments on the market when it undergoes its natural volatility.
These days, I like to have CNBC on with the volume down. The layout on the screen is excellent and they have good headlines, but I can do without the constant commentary. My advice would be to use it as a resource like anything else if you find it useful, but realize that it’s a business that is out for a profit. Don’t feel guilty if you turn it off or use the mute button freely. I know I don’t.
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