Wednesday, October 27, 2010

Tyler Mathisen's Stupidity Is Showing On CNBC Today

Tyler Mathisen managed to demonstrate his incredibly stupidity and failure to grasp the difference between trading and investing this afternoon on CNBC.

It's about 1:40PM as I write this, and Ol' Ty just made a monkey out of himself.

Beginning an on-site report from a conference in Boston, he sputtered, to paraphrase,

'With all these sophisticated, fast trading algorithms, a staid old mutual fund doesn't stand a chance!'

For a guy who has ostensibly been reporting on financial markets for years, Ol' Ty really showed his lack of knowledge in that statement.

One thing which needs to be understood is that no matter how fast and complex the methods that trading desks use will become, they don't have appreciable effects on investments which are not fast-trading strategies.

It's not to say that buy-and-hold for years still works. But failure to buy an equity at the same price as some institutional trader, and paying a few cents more, won't matter much over months.

Of course, if you're Ol' Ty, and work for a network, CNBC, which insists on characterizing every investment decision with the nearly-trademarked phrase,

"So, what's the trade?!"

you wouldn't realize this.

It's bad enough that Ol' Ty can no longer distinguish between institutional trading and retail investing. It's worse when his ignorance and stupidity cause retail investors to misunderstand the markets and panic.

Good job, Ty. Looks like you've earned your money today.

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