Turn Off TV \u2013 Emperor Media Has No\u00a0Clothes!<\/h2>\n
\n \t\tMay 1, 2025 at 2:23 pm<\/a><\/em>\n\t\t \t\t \t\t<\/p>\n Famous Danish author Hans Christian Andersen told a renowned fairy tale of an emperor who was conned into believing he is wearing an invisible suit. The crowd was too embarrassed to acknowledge his nakedness, so they pretend to not notice \u2013 until a young boy shouted, \u201cThe emperor has no clothes!\u201d<\/p>\n Much like the fairy tale, when it comes to pointing out the many shortcomings of the financial media, I have no problem yelling, \u201cThe Emperor Media has no clothes!\u201d<\/p>\n Media Spreads Fear and Misinformation<\/strong><\/p>\n Mark Twain famously stated, \u201cIf you don\u2019t read the newspaper, you\u2019re uninformed. If you read the newspaper, you\u2019re misinformed.\u201d That sentiment rings especially true amid today\u2019s swirl of alarming headlines. Here\u2019s a sampling of recent media-induced worries:<\/p>\n Is the sky falling? Is now the time to sell stocks, as the media often implies? Or are these risks being overstated and distorted by media outlets that chase monetary gains?<\/p>\n Issues are More Gray Than Black or White<\/strong><\/p>\n Journalists \u2013 most of whom have little investing experience \u2013 like to authoritatively paint economic issues in black-or-white terms. But most reasonable people understand that these matters are complex, and the truth lies somewhere in the gray. To claim the media offers a balanced view of both the positives and negatives of complicated financial topics would be disingenuous.<\/p>\n I have been investing for over 30 years, and while I\u2019ve never faced a global rebalancing of trade impacting trillions in economic activity, I\u2019ve lived through far more uncertain times. Not only have my investments survived those volatile periods, but they have also thrived \u2013 repeatedly hitting new record highs.<\/p>\n F.U.D. Sells!<\/strong><\/p>\n Does the media want you to believe the accurate, long-term stock market prosperity story? Hardly. As the saying goes, \u201cIf it bleeds, it leads.\u201d Fear, uncertainty, and doubt (F.U.D.) sell more ads, subscriptions, newspapers, and magazines. The more blood, sweat, and anxiety in the headlines, the more money the media makes from distressed readers.<\/p>\n Behavioral finance pioneers, Nobel Prize winner Daniel Kahneman and Amos Tversky, showed that losses feel twice as painful as the pleasure of gains (see the Pleasure\/Pain diagram below). Their Prospect Theory<\/mark><\/a> remains just as relevant today as when it was introduced in the late 1970s<\/mark><\/a>.<\/p>\n <\/a>Source:<\/strong> Investopedia<\/em><\/p>\n The greatest investor of all-time, Warren Buffett, once said, \u201cBe fearful when others are greedy, and greedy when others are fearful.\u201d Unfortunately, the media pushes the opposite mantra: \u201csell fear and buy greed.\u201d When markets fall, they sell Armageddon. When markets soar, they sell nirvana. During periods of over-optimism, they also exploit FOMO (Fear of Missing Out) by feasting on investors\u2019 emotional cycle of excitement.<\/p>\n Reassuring long-term investors that everything will be okay\u2014or that dips are buying opportunities\u2014doesn\u2019t generate as much media profits and ad sales. Fear does.<\/p>\n History Doesn\u2019t Repeat Itself, But It Often Rhymes<\/strong><\/p>\n Too many investors suffer from short-term thinking and goldfish-like memory. But as Mark Twain wisely stated, \u201cHistory doesn\u2019t repeat itself, but It often rhymes.<\/mark><\/a>\u201d And history has shown that listening to the media during times of extreme market volatility often leads to poor decisions.<\/p>\n Let\u2019s take a look at some key examples where media-driven fear was more misleading than helpful over the decades:<\/p>\n The Nifty Fifty Collapse (1973-1974)<\/u><\/strong><\/p>\n In the early 1970s, long before the \u201cMagnificent 7\u201d stocks came to the fore, we had the \u201cNifty Fifty\u201d stocks. These large-cap blue chip stocks traded at lofty P\/E (Price-Earnings) ratios and were seen as invincible before they came crashing down in 1973-1974. Suffice it to say, the media headlines were horrific during this period.<\/p>\n Here is some context for this period:<\/p>\n The media\u2019s response? Doom and gloom. Here\u2019s an example of this sentiment from the Newsweek<\/em> cover, \u201cThe Big Bad Bear,\u201d published on September 9, 1974.<\/p>\n For those who sold in fear, the results were disastrous. The Dow bottomed shortly after the magazine was released and the market rebounded +61% in less than two years. Panic was the wrong move.<\/p>\n \u201cThe Death of Equities\u201d (1979)<\/strong><\/p>\n Inflation plagued the 1970s, and just before one of the longest bull markets in history, BusinessWeek<\/em> declared \u201cThe Death of Equities\u201d on its now-infamous September 1979 cover. Once again, the media acted as a perfect contrarian indicator with the Dow quadrupling over the next decade.<\/p>\n Dot-Com Bubble: \u201cThe Hottest Market Ever\u201d (2000)<\/strong><\/p>\n In March 2000, at the peak of the tech bubble, Money magazine ran a cover story: \u201cHow to Invest in the Hottest Market Ever.\u201d Weeks later, the bubble burst. Suboptimal timing once again.<\/p>\n In that same timeframe, Newsweek<\/em> captured the essence of FOMO with its July 5, 1999 cover: \u201cEveryone Is Getting Rich but Me.\u201d Right when risk was at its peak, most investors were blind to it and got sucked into the downdraft.<\/p>\n Source:<\/strong> NewsWeek<\/em><\/p>\n Financial Crisis \u2013 Depression 2.0 (2008)<\/strong><\/p>\n In October 2008, the Time <\/em>magazine cover encapsulated the zeitgeist of the period with a 1929 photo that included a line of desperate people waiting for food donations at a soup kitchen. Many feared a second Great Depression. Yet it was one of the best times in history to buy stocks with the Dow tripling over the next decade.<\/p>\n Brexit Panic (2016)<\/strong><\/p>\n Media coverage around the U.K.\u2019s Brexit vote to leave the EU (European Union) painted a picture of imminent recession and contagion. Instead, the media blitz surrounding Brexit turned out to be more molehill than mountain. Markets rebounded strongly and reached new highs in the subsequent months.<\/p>\n \u201cRocketman\u201d and North Korea Missiles (2017)<\/strong><\/p>\n Tensions flared in 2017 as North Korea tested missiles and President Trump threatened retaliation against dictator Kim Jong Un by bombing Pyongyang and \u201cRocket Man\u201d. The media went into overdrive regarding the nuclear unease, but the market brushed it off and continued climbing +58% over the next few years.<\/p>\n COVID-19 Pandemic (2020)<\/strong><\/p>\n With over 3 million deaths worldwide and a grinding halt to the global economy, markets initially fell roughly -35%. But as consumers stockpiled toilet paper, fast vaccine development and stimulus sparked a powerful rebound, with stocks finishing the year up +16%. Over the next two years, the Dow almost doubled.<\/p>\n Hostage to Our Lizard Brain<\/strong><\/p>\n Why are we so susceptible to the sensationalist tendencies of the media? Evolution holds the answer. Humans\u2019 DNA and brains are hard-wired to flee prey. The small almond-shaped tissue in our brain called the amygdala\u2014or what author Seth Godin calls the \u201clizard brain\u201d\u2014evolved to respond instantly to danger. When headlines scream \u201ccrash\u201d or \u201cwar,\u201d our emotional brain overrides our logical one, which leads to poor long-term results. As Seth Godin explains, we\u2019re wired to react, not reflect (Watch here<\/mark><\/a>). And the media knows it.<\/p>\n Headlines Change but the Long-Term Market Trend Doesn\u2019t<\/strong><\/p>\n Despite a barrage of negative headlines, stocks have remained resilient over the long run. The market has overcome wars, assassinations, currency crises, banking failures, terrorist attacks, pandemics, natural disasters, impeachments, tax hikes, recessions, restrictive Fed policies, debt downgrades, inflation, and yes, even tariffs (see chart below). Since WWII, we\u2019ve had 12 recessions\u2014each followed by a full recovery to new record highs. In baseball terms, the economy has batted a perfect 1.000 (12-for-12) with recession recoveries.<\/p>\n How to Survive the Avalanche of Media Headlines<\/strong><\/p>\n Here are five key strategies:<\/p>\n Buying high (greed) and selling low (fear) is not a recipe for long-term investment success.<\/p>\n In the age of constant connectivity, headlines and the 24\/7 news cycle are addictive. But if you\u2019re tired of being a pawn in the media\u2019s game, I invite you to join my fight by acknowledging that the Emperor Media has no clothes.<\/p>\n www.Sidoxia.com<\/mark><\/strong><\/a><\/p>\n Wade W. Slome, CFA, CFP\u00ae<\/strong><\/p>\n Plan. Invest. Prosper.<\/em><\/p>\n This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (May 1, 2025). Subscribe Here<\/mark><\/strong><\/a> <\/mark>to view all monthly articles.<\/p>\n DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on the IC Contact page.<\/p>\n \n\t\t\tEntry filed under: Behavioral Finance<\/a>, economy<\/a>, Education<\/a>, Financial Markets<\/a>, Financial Planning<\/a>, Fixed Income (Bonds)<\/a>, Government<\/a>, Interest Rates<\/a>, International<\/a>, Politics<\/a>, Stocks<\/a>, Trading<\/a>. Tags: Sidoxia<\/a>, investing<\/a>, bonds<\/a>, Stocks<\/a>, financial crisis<\/a>, Wade Slome<\/a>, stock market<\/a>, recession<\/a>, economy<\/a>, Federal Reserve<\/a>, equities<\/a>, Politics<\/a>, behavioral finance<\/a>, media<\/a>, geopolitics<\/a>, tariffs<\/a>, depression<\/a>, fake news<\/a>, misinformation<\/a>, emperor has no clothes<\/a>.\t\t<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":" Turn Off TV \u2013 Emperor Media Has No\u00a0Clothes! May 1, 2025 at 2:23 pm Famous Danish author Hans Christian Andersen told a renowned fairy tale of an emperor who was conned into believing he is wearing an invisible suit. The crowd was too embarrassed to acknowledge his nakedness, so they pretend to not notice \u2013 […]<\/p>\n","protected":false},"author":1,"featured_media":223705,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[1778,21317,10999,9319],"dealstore":[],"offerexpiration":[],"class_list":["post-223704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-clothes","tag-emperor","tag-media","tag-turn"],"yoast_head":"\n![\"\"](\"https:\/\/investingcaffeine.com\/wp-content\/uploads\/2025\/05\/emperor-media.png?w=538\")
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