It is a basic tenet of investing that the Business Media usually provides a contrarian signal. Often, these signals are explicit in nature and get noticed due to an act of commission from the Media and its Management.
For example, CNBC Management decided on July 5 to replace the daily 8 pm telecast of their aggressive, risk-oriented “Fast Money” show by another show that preaches avoidance of risk. This act ended up giving a contrarian market signal to investors to add more risk. (see our article – “Did CNBC Management give us a Market Signal – Yes they did” – August 16, 2008 – https://cinemarasik.com/2008/08/10/did-cnbc-management-give-us-a-market-signal–one-month-update.aspx).
Sometimes, such signals might be generated by a persistent or deliberate act of omission. On August 23, we highlighted the stubborn and, perhaps, motivated effort by CNBC Anchors to avoid discussing returns from US Treasuries. (see out article – “Are CNBC Anchors on a Mission Against US Treasuries? – A Viewer’s Perspectives” – https://cinemarasik.com/2008/08/19/are-cnbc-anchors-on-a-mission-against-us-treasuries–a-viewers-perpsectives.aspx).
During the past two weeks, CNBC Anchors have continued to ignore US Treasuries as vehicles that could provide decent returns. So we decided to check whether this studious and perhaps, deliberate avoidance provided a buy signal.
According to Bloomberg.com, the price of the 30-Year Treasury Bond went up by 3% in the two weeks since our article and the 10-Year Treasury Note was up 1.5% in price in that period. In comparison, the Dow Jones Industrial Average, the pride and joy of CNBC Anchors, fell by over 400 points, a loss of approx. 3.5%.
So the behavior of CNBC Anchors did prove to be a contrarian indicator and their persistent, studious neglect of US Treasuries seems to have given CNBC viewers a Buy Signal for US Treasuries.
Up 3% in two weeks in these market conditions! Seems like fast money to us. Yet, CNBC’s “Fast Money” show missed this Treasuries trade. Does this suggest that a safer way to find fast money might be to look where the “Fast Money” show doesn’t?
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Did CNBC Anchors give us a Market Signal? Yes they did
