Market Indicators: The Best-Kept Secret to More Effective Trading and Investing

Chapter 9. Reporting the Financial News, Gauging the Investor's Psyche

	The man who reads nothing at all is better educated than the man who reads nothing but newspapers.
	--—THOMAS JEFFERSON

	Charlie and I love newspapers—we each read five a day—and believe that a free and energetic press is a key ingredient for maintaining a great democracy.
	--—WARREN BUFFETT, in his 2006 annual letter to shareholders

Back to the time of smoke signals, people have wanted to hear the news. There's a sense of community in knowing who is doing what and where one stands among the crowd. Thomas Jefferson hated the media for the lies—and occasional inconvenient truth—it spread in his day. Modern-day investors consume hours of media every day in attempts to track the progress of an increasingly complex and interconnected world. Between television, radio, and print, media outlets offer an astonishing amount of financial and market information.

Some of that information is vital, reporting key company news and industry developments. The best journalists also report on developing trends, which tend to evolve over months or years.

The daily buzz of financial reports also contains a fair amount of "noise": information that's not especially important, or has taken on exaggerated significance.

In his book The User Illusion (Penguin, 1999), Danish scientist Tor Nørretranders notes that the human mind consciously processes just sixteen of the eleven million bits of information our senses collect every second. The ...