Financial Journalism Fails its Readers

Michael EdesessIt is virtually impossible to write journalism without editorializing. A journalist must write at least what she firmly understands to be the facts, even when she is merely quoting someone who she believes knows the facts. Journalists have, for example, confronted a problem with Donald Trump because he lies so frequently. So they have adopted a way of reporting on what he said, for example, “Trump baselessly claimed that the 2020 election was stolen.”

Editorializing intrudes subtly in other reporting too. For example, if one reads a news story in a mainstream U.S. publication about relations between China and the United States, but imagines that it is instead about France and Germany, one may be able to detect the tacit intimation that one country is well-intentioned while the other is cold and calculating and ill-intentioned. It is nearly impossible to eliminate slant because the story is built on top of the reporter’s and her profession’s underlying assumptions.

Financial journalism has a problem. Apart from a few writers such as Michael Lewis, it is essentially bought and paid for by the financial industry itself – especially, investment management. To the extent that it editorializes, it is sycophantic to the industry.

I was motivated to write this piece by a June 7 article in the Financial Times titled “Nvidia’s rally forces money managers to play catch-up.” Unlike articles about known liars and exaggerators, this article – like so many others in the financial press – expresses no skepticism or reservations whatsoever about the practices on which it reports. As a result, it reads as if the money management actions on which it reports are perfectly normal, and sensible, and an example of the industry’s application of its savvy and expertise.

“Normal” yes. But sensible, and an example of the use of its expertise by an industry savvily pursuing what are assumed to be its objectives? No.

We better catch up with that horse by closing the barn door

The article’s opening sentence says, “Big money managers missed out on the rally in Nvidia and spent the past two weeks catching up, racing to amass shares of the U.S. company that has become a go-to bet on artificial intelligence.”

Does this make any sense? They missed the rally, so they’re scurrying to buy it now, when now is too late. This is the opposite of the advice dispensed by hockey great Wayne Gretzky, “Skate to where the puck is going to be, not where it has been.”