The market was down 3% yesterday although you’re more likely to see this as DOW PLUMMETS OVER 800 POINTS. I don’t know why it’s down, but neither does anyone else. No one knows what it will do from here, either. However, I do know how things will play out on CNBC as every perma-bear in New York City is wetting their pants waiting for their booking agent to tell them what time to arrive on set. I expect doom n’ gloomers making victory laps and appealing to our baser instincts.
It’s All SportsCenter’s Fault
The golden age of ESPN was wall to wall SportsCenter and actual sporting events. Today it’s talk shows and even SportsCenter is less focused on actual sport and more story-driven. Why? Drama sells. The WWE is basically soap operas for rednecks and you’re smarter than a redneck, right? ESPN is the WWE of sports. What’s really fascinating is that we know that wrestling is fake. Wrestlers are assigned good guy and bad guy roles by the nerds writing the scripts. We think of ESPN as delivering sports news, but they’re really setting up heroes and heels just like the WWE. Think about this the next time you see the first 20 minutes of SportsCenter discussing who said what about whom instead of delivering scores. The oxygen in the sports scene is being sucked up by talking heads and hot takes. Actual sports is secondary. ESPN’s morning talk show ‘Get Up’ (or maybe it was one of the other ones, they’re all equally forgettable) had a beautiful segment poking fun at this evolution. It was called something like: The Best Ever (of the last 24 hours), poking fun at sports media hyperbole.
Back to Money
What’s being marketed as news is more often entertainment. Tomorrow’s CNBC broadcast is going to have at least a couple of folks on talking about how you could have avoided the market drop. Humans love to fantasize. What if I avoided that 3% loss yesterday? What if I hit the lottery? What if the Browns win the Super Bowl? And before you know it, you’re wondering whether $50 million will buy you the biggest boat on Lake Erie and how long it would take you and Baker Mayfield to cruise the entire Mississippi River.
More air time will be spent stoking anxiety. It’s bad enough laying in bed at 1am wondering if that cute girl from Junior year remembers how you said shir-kay because your stupid brain couldn’t pick sure or ok. For the record, she told all of us and we bring it up behind your back all the time. Anxiety is even worse when it involves your money. What if the market goes down again tomorrow? What if it’s down the rest of the quarter? What if the market never goes back up ever again? Before you know it, you and Baker are dancing for nickels along the Cuyahoga River on a raft of discarded pallet-wood as your friends and family look on, disappointed.
Speculation and anxiety are just two sides of the fantasy coin. Taken too far, it’s just pornography of one sort or another, engineered to keep you reloading your social media feed. Check out this video of Tiger Woods winning the TOUR championship last month. The crowd is noisy and boisterous, but there is one sound you don’t hear: clapping. Why? You can’t clap with a phone in your hand. All these people can post video of this final hole, but were they truly there? This navel-gazing is no substitute for interacting with reality. Using media (whether that’s the old guard or new/social media) to gauge the importance of the crisis of the day is insane. You shouldn’t budget your life as if you’ve already won the lottery just like you shouldn’t daytrade your life savings in reaction to a bad day for the stock market. The new media is a prism distorting reality into a false rainbow – a twisted imitation of the real thing.
This is not to say that social media or the media at large is worthless. I freaking love twitter. I caution against using media as a substitute for thoughtfulness. The market was down yesterday. This doesn’t make the perma-bears winners and the rest of us losers (most of the perma-bears are invested in stocks, too, by the way). If your investment philosophy boils down to a binary winner/loser outcome, you’re doing it wrong, but that’s the message we get so often from people who should know better. They seem to forget that stocks were down 10% earlier this year on supposed fears of World War III. And now we’re supposed to freak out because the Chairman of the Federal Reserve said the economy’s kicking more ass than expected or it’s some delayed reaction to rising Treasury yields? Shir-kay.