traineeinvestor
Thinks s/he gets paid by the post
My experience with the media on financial topics is that there is an inherent bias towards "customer/small investor = good/unfairly mislead or harmed" and "megacorp = bad/unethical/greedy".
The appallingly bad coverage of the fall out from the collapse of Lehman Brothers on holders of Lehman Brothers structured producs is a perfect example of this. Just about all of the mainstream media reports whcih I read/watched focused on:
1. the fact that they were structured products rather than simplistic bonds, notes or equity securities - it was consistently either stated or implied that this meant that they should never have been sold to retail investors in the first place. The fact that the products contained derivatives was considered a complete analysis the reason why people had lost money and why they should never have been sold in the first place - this was a completely and obviously false analysis
2. because of the security features, the holders of these structured products were often actually better off than holders of plain vanilla notes etc. This was not mentioned in any of the press I read on the issue - not once in several months of reporting
3. the hardship caused by people who had invested their entire life savings in these products. This was always done at the unsolicited behest of the bank/broker selling the products. There was absolutely no mention of the investor's role in the decision making process and (usually) no mention of the fact that the investor would have signed a piece of paper to the effect that they had made the decision themselves
4. almost none of the media reports made any mention of the fact that all investors were (or should have been) provided with documents describing the products including a very bluntly written risk disclosure. It was very rare for the media to ask whether investors had actually read the materials (in Hong Kong investors are requried to confirm they have done so before investing) and whether they understood the statement that there was a risk of total loss of investment
I could give other examples as well.
The problem with this type of reporting is that I instinctively end up wondering what the media is not telling me when I read/watch the news. This may not be a bad thing as it forces me to think more carefully, but uncertainty over the reliability of media reporting does nothing for helping people make decisions with confidence.
Disclosure: none (unless you count shares in banks held through index funds)
My own limited experience in being interviewed by the media has also been very negative. On two occasions my position was completely misrepresented.
The appallingly bad coverage of the fall out from the collapse of Lehman Brothers on holders of Lehman Brothers structured producs is a perfect example of this. Just about all of the mainstream media reports whcih I read/watched focused on:
1. the fact that they were structured products rather than simplistic bonds, notes or equity securities - it was consistently either stated or implied that this meant that they should never have been sold to retail investors in the first place. The fact that the products contained derivatives was considered a complete analysis the reason why people had lost money and why they should never have been sold in the first place - this was a completely and obviously false analysis
2. because of the security features, the holders of these structured products were often actually better off than holders of plain vanilla notes etc. This was not mentioned in any of the press I read on the issue - not once in several months of reporting
3. the hardship caused by people who had invested their entire life savings in these products. This was always done at the unsolicited behest of the bank/broker selling the products. There was absolutely no mention of the investor's role in the decision making process and (usually) no mention of the fact that the investor would have signed a piece of paper to the effect that they had made the decision themselves
4. almost none of the media reports made any mention of the fact that all investors were (or should have been) provided with documents describing the products including a very bluntly written risk disclosure. It was very rare for the media to ask whether investors had actually read the materials (in Hong Kong investors are requried to confirm they have done so before investing) and whether they understood the statement that there was a risk of total loss of investment
I could give other examples as well.
The problem with this type of reporting is that I instinctively end up wondering what the media is not telling me when I read/watch the news. This may not be a bad thing as it forces me to think more carefully, but uncertainty over the reliability of media reporting does nothing for helping people make decisions with confidence.
Disclosure: none (unless you count shares in banks held through index funds)
My own limited experience in being interviewed by the media has also been very negative. On two occasions my position was completely misrepresented.
