This is the Third Year of Macro Viewpoints Awards. We began these awards in 2009 from a Viewer’s perspective, that of an Individual Investor Viewer. Investing, in our judgment, is the second most important task for an individual, for a family. Earning a paycheck is and will always be the first. But, these days paychecks are neither big nor growing. So families have to invest more and more for the proverbial rainy day, for children’s education and for retirement.
Individual investors don’t have many places to turn to for advice. Brokerage firm advice is flawed, biased and has become a sales tool for fee generation. So the only place left for supposedly unbiased advice is Financial Television. Networks like Bloomberg TV, CNBC & Fox Business have the opportunity, the challenge and the mission to help with hopefully unbiased and straight talk about turbulent and troubled financial markets.
Our annual awards were established to acknowledge and highlight the best we saw on Financial TV during the year. Our standards are as rigid as they are elastic, just as they were last year:
- We like “expert” Guests, TV Anchors or TV Shows IF they make us money or at least IF we would have made money had we listening to them. In this context, we include “not losing money” or “saving capital” in our definition of making money. We like them more if they reveal an insight we would not have observed ourselves. And we adore Simplicity.
Our prior winners for the Most Useful Financial Guest Award are:
- David Tepper – 2010
- Meredith Whitney – 2009
Frankly, these two were in a zone in their respective years. It is hard to stay in a zone in any business. It is especially difficult to do so in the complex, turbulent, ever changing investing game. Take Meredith Whitney. She was prescient in 2009 but blew up in 2011 with her Muni defaults call.
Our prior winners for the Most Useful Financial Show Award are:
- CNBC Fast Money – 2010
- CNBC Squawk Box – 2009
The 2010 winner kept up its performance in 2011 but the 2009 winner essentially skidded off the road.
So who are the Macro Viewpoints winners for 2011?
I. Most Useful Financial Guest of 2011
The simplest way to make the most money is to be invested in the best performing asset class and to avoid the worst performing asset class. Like anything truly simple, this is profoundly difficult to achieve. That is why, the investment fee-collectors (sometimes known as long only managers) came up with the enticing buy & hold sales pitch to lull individual investors into complacency.
This year, the best performing asset class has been US Treasuries. So it stands to reason the most useful guest should be one who told you early and clearly to buy Treasuries. That guest is Jeffrey Gundlach of Doubleline. Mr. Gundlach not only told viewers to buy Treasuries but he also told viewers to stay out of financial stocks, especially Bank of America. His predictions about Europe were prescient.
Look at his performance as a guest on FinTV:
- Friday January 14 in a Bloomberg phone interview – “If we break to lower yields thanks to weak economic data, then we should see a pretty good rally in the 10-year…As this correction to the downside is unfolding in the weeks ahead, Treasuries will be the best performer…”
- Wednesday, January 19 on CNBC Strategy Session – “High yields are at the richest level in history vs Treasuries.”
- Wednesday March 9 on CNBC Strategy Session – “It is time to ring the register in risk assets…the US is a debt-clogged economy, credit card debt & public debts have been rung up and deflation is always around the corner…I think in the short term, meaning from now until labor day, we are going to make the most money in long term government bonds….Emerging Market Equities are topped out in a very convincing way…” .
- Tuesday, May 24 on CNBC Strategy Session – “I kinda think we are looking at some sort of echo of the credit crisis coming up here. That’s what I am afraid of…. I really do believe that we are looking at the beginning of a repricing lower in risk assets…”
- Thursday, June 30 on CNBC Strategy Session – “I still look for further markdowns in credit…we are holding cash in anticipation of cheaper prices in credit……”
- Monday August 8 on CNBC Strategy Session – “I just think the [US] downgrade is outright silly…I hate Bank of America ..It’s a freight train…Get off the tracks. The momentum towards lower prices of Banks is
overpowering at this point. BofA – don’t own stock and their bonds…” - Tuesday October 4 on CNBC Strategy Session – “…high yield bonds were two standard deviations rich… in March-April and now you are one & half standard deviations cheap…you should not sell bonds to buy equities ever...there is a huge loss emanating out of Europe …means avoid Europe , avoid banks…no investments there at all…”
In summary, Jeffrey Gundlach told viewers to sell high yield bonds and buy Treasuries, sell risk assets, sell or short Bank of America, avoid Europe and Banks. This man has been in a zone all year. Anyone who followed his advise had a good investing year.
So we present the Macro Viewpoints Most Useful Financial Guest of 2011 Award to Jeffrey Gundlach.
II. Most Useful Financial Show of 2011
Posthumous awards are celebrated in the military. Extraordinary bravery is sometimes exemplified by the ultimate sacrifice by a soldier. But posthumous awards are very uncommon in non-military arenas. So we might be making new tracks in FinTV with this award. Our standards for this award are firm:
- Add the most money-making value to viewers,
- Provide insight that is not readily available elsewhere,
- Keep it simple & profound.
On this basis and despite the cancellation of the show by CNBC, we present the Macro Viewpoints Most Useful Financial Show of 2011 Award to CNBC Strategy Session.
No other show consistently performed to these high standards this year. Others may disagree. In fact, CNBC Fast Money, the 2010 winner, might argue that they did this too. And they might be right to an extent. But CNBC Fast Money has a narrow mission and a narrow time horizon. What they tell you on one day becomes obsolete in a couple of weeks and this year, even in a couple of days.
In contrast, the investments of most individual investors are Slow Money and their investment horizon is medium term. For such viewers, for such monies, CNBC Strategy Session did a heroic job in 2011. Look at the evidence:
- Content – Guests: Jeffrey Gundlach won the Macro Viewpoints Most Useful Guest of 2011 Award. His recommendations were simple and profound. Kyle Bass, another regular guest, provided insight about the European Debt Crisis better than just about any other guest on FinTV. The show brought in smart and relatively new guests like Steven Walsh who discussed the broken state of major bond markets. David Faber, the show’s co-anchor, made it his mission to bring in veteran investment guests that are not ordinarily seen on FinTV.
- Content – Topics: The show made it a point to discuss markets like Municipal Bonds, High Yield Bonds as well as a broader range of investment themes. This was a major departure from Old CNBC which was all about which mutual funds or stocks to buy and hold for ever. David Faber and Gary Kaminsky, the co-anchors, made it their mission to differentiate the show by its content.
- Making Money for Viewers: Gary Kaminsky gave very valuable and timely advice to individual investors. He made it a point to focus on the need for income of American Families and how that should become a secular investment theme. He stood up and told viewers to buy Municipal bonds during a vicious sell-off in the first quarter. That sell-off was partly due to a vociferous call by Meredith Whitney about massive defaults to come in the muni space. Kaminksy vehemently disagreed and told viewers why. His public stand was a courageous call, not the type FinTV anchors make or get right. Viewers who listened to Gary Kaminsky are probably in a festive mood right now. This was simple, direct stuff, the sort that later gets to be called profound.
As we said before, we cannot think of another show that added so much value this year to slow money, medium term individual viewers. That is why CNBC Strategy Session deserves the Macro Viewpoints Most Useful Financial Show of 2011 Award. And “deserves” got every thing to do with it in our books.
III. Lesson of Strategy Session for all FinTV shows
Skill and content were paramount in the gladiator arenas of Rome. If you were not a skilled warrior, you were killed. The tactical content or the versatility in hand to hand combat was just as critical for survival. But to be really successful, to become so important to the masters that they kept you alive to generate money for them, gladiators needed something much more. What was it?
Remember the famous shout by Maximus Decimus Meridius in the movie Gladiator? After killing an ex-champion in the arena, an ex-champion brought back to kill him, Maximus turned to the crowd and shouted,
- Are You Not Entertained?
This was the lesson, his mentor and his slave owner had taught the Spaniard, the name which Maximus carried into the ring. To survive, you got to get the crowd on your side. You own the crowd, you own Rome.
This is an all important lesson for FinTV anchors. We viewers are your crowd. To survive, you must keep our attention. Otherwise, you will lose us. Remember, finance puts most people to sleep. Markets are usually boring. Ideas and investing insight will attract viewers. But to make us regular viewers , you must entertain us. This is the secret of ESPN’s success. This is what we have argued for over three years, that Financial Networks need to become EMPNs to remain successful.
CNBC Strategy Session not only forgot this, but looked down on it. Actually, we think, David Faber and Gary Kaminsky detested this concept. They felt they were doing missionary work in educating their “dumb” viewers (“masses” in TV Anchor lingo). Unfortunately, they let their viewers see their smug self-satisfaction about being “intellectual”. It was a big turn-o
ff. And we were scathing in our criticism expressed privately to the show.
CNBC Management also made a major mistake in placing this show adjacent to CNBC Fast Money Half Time Report. The Fast Money shows are the closest thing to an EMPN show today. The half hour Fast Money show that immediately followed Strategy Session was even faster in tempo than the one hour show at 5 pm. And self-satisfaction or intellectual “airs” don’t stand a chance on Fast Money. Other traders on the show are just waiting to pounce on any such failings.
So, despite all the good it did and all the real value it added, frankly Strategy Session did not stand a chance. Fortunately, the failings of the show were mainly in its presentation. And these are easily fixed. We sincerely hope that CNBC Management does so. There was simply too much good in Strategy Session to let it die.
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