Use the News: How To Separate the Noise from the Investment Nuggets and Make Money in Any Economy

Use the News: How To Separate the Noise from the Investment Nuggets and Make Money in Any Economy

by Maria Bartiromo

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Product Details

ISBN-13: 9780066620879
Publisher: HarperCollins Publishers
Publication date: 06/04/2002
Edition description: Reprint
Pages: 304
Product dimensions: 5.31(w) x 8.00(h) x 0.68(d)

About the Author

Maria Bartiromo a former producer, writer, and editor of CNN Business News, now hosts and coproduces her own show on CNBC, Market Week with Maria Bartiromo. She also anchors CNBC's Street Signs and Market Wrap on a daily basis. She is a contributing news commentator to NBC's Today Show, MSNBC, and other NBC affiliates nationwide. Her popular monthly column can be found in Individual Investor magazine. A graduate of New York University, she lives in New York City with her husband , Jonathan Steinberg, founder and chief executive officer of Individual Investor Group.

Read an Excerpt

Chapter One

It's Not Brain Surgery

When you buy a car, you kick the tires. When you buy a house, you look in every nook and cranny. You need do to the same thing with your investments. And there's no reason why you can't.

Learning how the market works isn't brain surgery. I'm living proof of that. I'm hardly a mathematics whiz. In fact, a couple years ago, I ran into my high school math teacher and she said, "I can't believe you cover finance." I never took any classes in Wall Street 101, either. I learned it from the ground up. Okay, I studied economics in college, where I learned about the relationship between supply and demand and the difference between macroeconomics and microeconomics. Big deal. You don't learn how markets move in school. You learn that by following the markets and watching trends. In my case I learned it on the job.

So how did I end up with this job?

In my sophomore year at New York University (NYU), I took an introductory course in economics. A lot of people are bored to tears by the topic, but I was lucky because I had a professor who made it exciting. I loved it and I was sailing in it, so I decided to make it my major.

Then my mother said, "Why don't you take some journalism classes? I think you'll be good at them." I loved them too. The excitement of covering a story was similar to the excitement of figuring out an equation in economics, maybe even more so because there was a greater sense of urgency. A few more journalism classes and I ended up switching my major to journalism and making economics my minor.

By now I was a junior in college and I had no idea what I wasgoing to do after graduation. That year I took a class in broadcast journalism. It was one of my favorite classes. Every week the class produced a story and each of the students took a different role. One week I was the anchor, one week the guest booker, one week the producer.

I loved being the producer. You formulate the whole show, from soup to nuts. You have to decide what content to run, which video or graphic to use, and how to make each story come alive with sound and interviews. You have to think, Was the video freshly shot today or will it be misleading because it's file video? Do I want one anchor or co-anchors? Who are my guests? Do I want a kicker'a softer story'at the end of the show? How about music or animation? It's a lot of fun.

As a result of taking this class, I applied for admission to NYU's internship program in broadcasting. At the time all I wanted to do was work for NBC, CBS, or ABC. The networks were hot, I thought, and they were where the action was. I was accepted to the internship program, but to my disappointment I was assigned to work for CNN. I didn't even watch cable and felt that working for ABC, CBS, or NBC held more prestige than working for the very young cable channel. I took the job and started work as an intern at CNN Business News in 1988.I soon realized that CNN was the best possible place for me to have gotten a job. At CNN I was able to do everything. I would get the numbers, that is, fill in stock quotes for the anchors. I would rip scripts'that's what it's called when the scripts are printed out and distributed to the producer, director, and anchors. I would teleprompt, where you manually move the scripts forward on a machine so the anchor can read them on camera. I would follow the wire service stories. I was able to do so much more at CNN than I would have been able to do at the networks, because the networks are unionized and I would not be able to do so many different tasks. So it was so fortunate for me to land at a place where I could gain wider experience and figure out what I was good at.

Eventually CNN offered me a staff position in business news. I worked my way up, first as a writer, then as a producer, and then as an assignment editor, which meant that I came up with story ideas and decided whom I wanted to interview and who would conduct the interview'either reporters or myself.

It was at CNN Business News where I first started noticing the chart trends tracking investor momentum in the stock market, first realized the importance of insider buying and selling'that's when a company's senior management buys or sells some of their holdings in the company's stock, which can be an important indication of their sentiment about the company's future'and first learned the significance of money flows. It was also where I first saw the impact that the price of oil has on the stock market.

The Gulf War began in August 1990, and Operation Desert Storm began the following February. In a nanosecond CNN was the hottest thing on television. You had CNN correspondent Bernard Shaw reporting live from a hotel room in Baghdad while bombs from an American air strike rained down outside his window. The world was watching CNN. It was frightful but...(it was thrilling). I felt proud to be a part of the team.

We in CNN Business News were watching the war's impact on the stock market, and that was thrilling too. We looked for the nuggets of news that would explain how the war would affect investments. Oil prices were surging because people were afraid that oil shipments from the Middle East would dry up. It was one of the biggest business stories and it was news. Oil is one of the biggest costs, if not the biggest cost, for corporate America. The airline, railroad, and automobile industries are the most obvious businesses fueled by oil; electricity is created from burning oil and gas. The price of oil was also affecting consumer spending. If you're paying more to gas up your car or heat your house, your disposable income drops. You don't have the money for an extra coat, big vacation, or new car. It was the first time in my career that the price of oil became so important to our everyday lives, the economy, and the stock market. It certainly wouldn't be the last.

Interviews

Author Essay
In the decade or so that I've been reporting on Wall Street and business news, we have seen a explosion of information about investing, the stock market, the economy, and personal finance. We see it in the myriad of magazines and newspapers, in the skyrocketing number of Internet web sites -- more than 352,000 web pages on investing, at my last count -- and in television programs with reporters like me who make it their business to ensure that the news that will affect your investments tomorrow is in front of you today. Together, we've created an extraordinarily rich information library that is open to everyone.

I think the explosion of information is terrific, and I'd be the first to say that it's detrimental not to take advantage of it. I'd also be the first to say that there is an information overload. I know because I deal with it every day. And it's only getting worse.

Do I feel overwhelmed with information? Constantly. Every day, I've got to sift through the newspapers, the wire services, my favorite web sites, the sources who are calling me, the phone calls I'm making, and the information that's generated just from talking to people on the floor of the New York Stock Exchange. I get a ton of faxes and so much email that I have to delete items from my emailbox before I can read the latest notes. (Frankly, I think situations like that are why analysts love storage company stocks so much.)

But at a certain point, I need to decide what is news and what is noise so that I can focus on one and ignore the other.

What do I mean by news and noise? News is important information that may influence your investments. Noise is talk or buzz or some headline that prevents you from seeing a story clearly. News is useful. Noise is a distraction.

It's never been easy to separate the news from the noise and, to be honest, these days it's only getting harder. Information comes gushing out -- from the government, from companies, and from analysts. You're also influenced by news headlines, market pundits, Internet chat room gossip, and hot tips from your Uncle Joe. One analyst I know compares researching stocks today to trying to drink from a fire hose: There's so much coming at you so fast that you don't know how to handle it.

Yet it's vital for all investors to keep abreast of the news that affects their own portfolio. It doesn't matter whether your money is in individual stocks or in mutual funds, whether you're a frequent trader or a buy-and-hold investor, whether you're hoping for a fast payback or are funding your retirement account, or whether you actively manage your money or let someone else make the decisions. You, ultimately, are responsible for your money.

That's why I've written this book: to explain, on the basis of my experience, how to separate the news from the noise.

Information is no longer an investor's key commodity. With information so readily available and basically free, the most valuable commodity for an investor is good judgment: how you interpret the information.

To help you hone your judgment, I've looked to people who have a reputation for being thoughtful interpreters of information. One of my biggest assets as a reporter is my Rolodex. In this book, I give you access to it. I've picked the brains of some of the brightest people on Wall Street: CEOs of some of the top corporations in America who have seen how market trends can affect a company's stock; money managers who have billions of dollars at stake; money flow watchers; and truth-telling analysts who were the first to warm investors that Wall Street's drums might be beating the wrong message. I'll tell you exactly which pieces of economic, financial, and company information these market insiders consider news -- or noise -- and how they use the news to make winning investment decisions.

Together, we'll list the top noisemakers, too. We'll show you how to avoid the mistakes that are all too easy to make when you're confused by noise. We'll translate Wall Street jargon into plain English. We'll catalogue the market's seasonal dips and rises on a calendar so that you won't be riding the market roller coaster blindfolded.

I have to warn you that the answers don't always come quickly and there's no easy formula to get them. But I will tell you what works for me, as I sift the news from the noise every day. I'll tell you how to handle the information overload so that you can get to the goods easily and efficiently. I'll show you how to get your arms around an unmanageable amount of information and make it manageable. I'll explain how to evaluate the data so you can make it work for you, make smarter investment decisions, and profit from them. (Maria Bartiromo)

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Use the News: How To Separate the Noise from the Investment Nuggets and Make Money in Any Economy 2.8 out of 5 based on 0 ratings. 5 reviews.
naveensreedevan 10 months ago
Maria is very honest and her feedback to her school teacher that to work in finance you can succeed with 'no math added' recipes is right. She implies that all wealth such as gold bars, coins, silver - are hidden in some creek/cavern by the mob and their stooges i.e. leaders who got elected with mob money - JFK,Bush, modi, gadhafi(CIA) , suharto, marcos(philippines 80s Asian Django). Therefore to get rich you either beat e'm all or join them or just do as they tell you. Maria should rename the title of such books to be line with the current practices of these leaders and so it can any of this: 1. Boardroom to Bedroom: End of the day, and sometime from mid day onwards 2. A hoe(bird) in bed is better than 2 or more in the boardroom 3. Touch down -how to win the gold nuggets and be your own Ace of base 4. Your news anchor is your quarter back -road to hell 5. All four bases covered -a home run with your banker and other ideas 6. My name is sue, this is the morning news! 7. Managing spreads, financial volatility -How to promote exotic derivative products the Maria way! 8. Breaking the glass roof/Ceiling -floors ,,collars and other spread derivatives for more profits! 9. Making th right noises -An insider tells all. what happens inside the boardrooms 10. Tv news anchors who killed the Rodeo star -end of good life
stockbookworm on LibraryThing More than 1 year ago
Maria is one of the best pundits in the business about business. Brains and beauty all wrapped up in one! This is a smart book and I'm glad I've got my copy. I refer to it all the time.
Anonymous More than 1 year ago
Guest More than 1 year ago
After reading "Confessions of a Street Addict" and "The Faber Report", this book seemed very sophomoric. I was not able to finish it.
Guest More than 1 year ago
This book is just so useful and informative. It is a must read for all individual investors