Live From the Floor of the Exchange

Should you care? News outlets show reporters at various exchanges (NYSE, Chicago Merc, etc), promising to reveal breaking news.

However, those reporters are the last people who’ll hear about it.

Most things are electronic these days, and you’ll have access to better information if you’re in front of a computer. Anywhere. You might need a fancy subscription to get nitty-gritty details and bid/ask spreads, but most people get more than enough information for free.

On the Floor

The floor of an exchange is a fascinating place.

Traders may have valuable insight that could help make short-term decisions, but it’s not that valuable. Think about it: how long will it be obvious to a floor trader that a stock was going to skyrocket (more than about 10 seconds)? In short order, the opportunity is gone.

If there’s a reporter bumbling around trying to get information, any trader with valuable information is too busy to provide it. Especially to a guy on live TV.

Why the Field Trip?

Why do they send a reporter to the exchange? If he’s just standing in the way, wouldn’t it be better and cheaper to keep him at the studio?

The Last Psychiatrist explains it well, so you can read more there.

The news media are interested in keeping your eyeballs on the screen, not your success. They want you to believe you constantly have to “do something” with your investments. They want investing to be like flossing – something you to do every day or you’ll have an increased risk of heart problems and bad breath.

Imagine the following report from the exchange:

“If you’re not going to spend your money in the next few years and you’re not a day trader then there’s not much happening, really. Go give your kids a hug and maybe take ‘em to the park. You probably did a good job setting up your portfolio, and you reviewed it a few months ago, so I’ve got nothing. Sure, a few stocks are gonna go up and down but what else is new?”

You’d never tune in again. You’d also have a better chance of reaching your long term goals and keeping up with your own investments. Most importantly, you’d have more time and energy for more important things.

If they actually provided valuable insight, you wouldn’t have to suffer through the painful advertisements that keep them on the air. It’d be worth paying to watch.