Yes, I know, you’re tired of seeing it. You’re tired of people talking about it. We could discuss the moral failures of the people in the industry, or we could be realistic and understand it’s a business committed to sensationalism, fear, and dogma. Those things pay for Anderson Cooper’s haircut he gets twice a week.
Anyways, how does this relate to investing? If you study some of the greatest investors, you’ll notice a reoccurring theme when it comes to the news.
They throw it in the trash.
At least when it comes to the relationship the news has to their investment decisions.
With the current news cycle creating hysteria, fear, anger, and political “activism”, it has never been a better idea to throw the news in the trash. Not only to make sure you don’t hinder your portfolios performance, but also to keep a level head that is focused on tangible goals and clear decision-making. It is very easy to get upset at the world. Meanwhile, you just yelled at a barista for messing up your coffee order, because the bird scooter you rode on to Starbucks on died and kept charging your account. We cannot fix the world on a top-down basis; it must be bottom-up. It must start with you.
I try to focus on microeconomics and ignore the macro scene. However, I will note the two things that scared the market in the last few years in the “news” category were the possibility of Russian collusion, and obviously, COVID-19. Now, obviously everything is easier in hindsight. If we gather the lessons from history, we can see that fear inducing events, sensationalized or not, where massive buying opportunities for those patiently waiting for a great company to become cheap through market fluctuations.
This brings me to the main point of this blog. If the news is going to continue to strangle the population with stories inundated with calls to action, fear, and chaos, could this possibly be an advantage to the long term investor?
If you own an exceptional company, run by exceptional management, you should be using every excuse to scoop up cheap shares for your portfolio. And if we continue to see a news cycle that will blow up anything they can into a world ending issue to make a current administration look bad (on both sides), then you should not pay attention to what is said, but so you can capitalize on the action of the mob. This is a trend I see continuing, and I hope the rage and fear does not boil over to the point where something serious happens. But for the time being, remain calm, seek excellence for your portfolio, and let the market hand you businesses on sale.