Why It’s Important to Cut Through the Hype to Find the Real Gems

I could do with fewer headlines. Or maybe I just want less yelling.

I remember a time, long ago, maybe in mid-2016, when CNBC didn’t spend 15 minutes straight talking about politics. But now, as I wake up every morning in the five o’clock hour central time and sip coffee, the hosts pour over daily political headlines and then squabble.

Afterward, they recount the president’s early morning tweets, which often include exclamation points. And this is on a financial news channel! After exercise, I eat breakfast and finish my morning with the papers, which once again scream at me with headlines about possible foul play and dirty deeds.

I understand why this happens. They all need me. They need my attention. They need me to watch the shows, receive the papers, and scan my eyeballs across their websites.

It’s nothing personal. Or rather, it’s everything personal. They must do whatever it takes to command my attention so they can stay relevant.

I get why the media resorts to hype. But every once in a while, it’d be nice if they’d stick to real news, just relating what happened instead of trying to sway me one way or the other. It will never happen, of course, because no one would buy the paper or tune in.

Who wants to watch a CNBC host say, “Not much is going on today, so we’re going to fill our time with cat videos from YouTube.”

And not many people will pay for a paper that goes from 30 pages to six. Still, it would make my life much easier by stripping away the noise.

Such a move would be too much of a revolution for many people. They’ve grown so accustomed to the emotional appeal for their attention that they have lost sight of what can really make a difference.

It reminds me of a scene from John Grisham’s book, The Firm. The lead character, Mitch McDeere, technically cooperates with the FBI, giving the agency what it needs to prosecute mob lawyers. But he doesn’t do it by giving up the mob. Instead, he provides records that prove mail fraud.

As the character tells an FBI agent, “It’s not sexy, but it has teeth.”

That should be a mantra in the news cycle and the financial markets today. Sexy has its place, but we’ve allowed the sensational to run amok. Our financial world now includes cryptocurrencies, sort-of money ideas that don’t exist but still command four-figure prices.

More than anything, I think that shows we’ve moved to the surreal world, based on financial hype, news hype, and the always-present political hype.

We’ve driven the markets to all-time highs, even though inflation remains modest, to say the least, and GDP is limping along, albeit assisted last quarter by auto replacements after Hurricane Harvey. Now is the time to take a step back and ask, “Is it really worth that?”

I don’t know if regulatory reform will keep pushing things higher. I don’t know if real tax reform or anything else they argue about on CNBC will pass.

But I do know we have to keep investing.

We have to keep looking for the smart ideas that have the best chance to grow, but aren’t based on air. After eight years of central bank intervention, it’s a tall order. It’s the sort of thing John Del Vecchio, our in-house forensic accountant, does well.

He spends his days specifically looking for undervalued companies that have great potential, but are currently flying under the radar. He doesn’t care about the hype. In fact, if a company has hype, it most likely doesn’t fit the bill.

Clearly John isn’t interested in developing fodder for cocktail parties. He simply wants to buy companies that go up in value.

Like Mitch McDeere’s legal charges, it’s not sexy, but it has teeth. In times like these, that’s a great thing.