How to Avoid Financial Fake News
Steve McDonald (SM): The topic this week is information sources. With the president claiming that there's all types of fake news out there, I have news for him: There's always been fake news in the money press.
So we have Matthew Carr here today to talk about reliable information sources and why that's so important if you're going to get the market right.
Matthew Carr (MC): Thanks for having me, Steve.
SM: It's my pleasure. We're not going to get political, I promise you. But is there a lot of fake news in the money press?
MC: Oh, I'm with you. I believe there's always been some sort of fake news or bias in the press. You know, when I was growing up, we were always taught to read, for example, The Washington Times and The Washington Post.
You read the same story in both publications. They each have a slant either to the left or the right. And you know that somewhere in the middle is the truth. And in the financial press, everybody's going to pick their sides.
We live in this divided world where our political affiliations sort of dictate everything that we do, so it is important you try to make sure you're cobbling together the best, clearest picture as possible, and a lot of times that just means pulling from as many sources as possible.
SM: Do you have a primary source of information that you like to use?
MC: I like Investor's Business Daily, The Wall Street Journal, Barron's and Morningstar. I'll try to read the same story multiple times from as many different publications as I can, so that way I can get as clear a picture as possible.
Now, if we're talking about economic stuff, like something to do with a certain sector, I will always go first to that sector's association. So if I'm going to talk about retail, I'm going to read the National Retail Federation's predictions and all of its notes.
If I'm going to look at cannabis, I'm going to look at the National Cannabis Industry Association and read everything that I can about it because that's going to give you the highs and lows.
Industry members are always going to give the best and the worst answers of how their markets are doing.
SM: Now, I know you're going to agree with what I'm about to say, but when you're in our business and you're making money predictions every day of your life, people will invariably come up to you and ask you for advice.
And I had someone come up to me the other day and go, "How can you be in that business when this economy is doing so badly?"
And I looked at her and said, "What are you reading?”
I mean, this is the strongest economy we've seen since I was a kid.
MC: You always hear that people are disenfranchised by the other side of the market.
I remember in 2013, I talked to a guy who was leaving the market because he said, "It's going to crash. The economy's going into the toilet. I'm just going to go ahead and sit on the sidelines." Now it’s five years later, and you can see where the market is - people fall into those sort of traps.
And we always hear those stories about how everybody thinks the world is collapsing or their view of the economy is bad.
I'll also say that a person's local economy may actually be really bad because it's not uniform across the country.
SM: Just as a wrap-up point, what's your best quick reference for information on making a decision for stock buying?
MC: For me, I go to the company itself. I will start pulling down all of its presentations, and I'll start looking at all of its quarterly results - I'll start with analysis there. I'll go through the conference calls. I'll read all those transcripts.
That's the best source for me. That's where I pull all of the data I use to make decisions. I will first and foremost go to the company and start reading everything from there because even if it tries to put lipstick on a pig, you can still see whether there's a problem there in between the lines.
SM: Yeah, you sure can. And thank you so much for taking the time to be with us today, Matt. It's always a pleasure.
MC: Thanks, Steve.
Thoughts on this article? Leave a comment below.