What is fake news?
I'm not going to talk about AAPL earnings because everyone is talking about Apple earnings but I am going to make you a better investor by helping you to break the habit of making investment decisions based on BULLSHIT! How do you know what is bullshit and what is not? At PSW, we do our best to help our Members weed through the market noise and separate the real news from the fake news so we're pretty good at it at this point.
I often point out the fact that Apple tends to be attacked into earnings by funds who want to drive the stock down, so they float rumors about Apple that they know AAPL will not respond to and there's not much we can do about that (Jim Cramer explains how "every fund manager does it if they want to keep their job") - other than applying logical analysis to the story to see if it makes sense. Something you can do, however, is to stop reading the publications that publish this BS as if it's real news.
Sales of the IPhone X are a good example. As it turns out, the IPhone X is Apple's best-selling smartphone EVER (for this part of the cycle) yet think about how many articles you read saying, very authoritatively, that the IPhone X was a disaster and people weren't buying them and Apple was going to discontinue it and give up on their "experiment". It's been going on for months yet the completely irresponsible "news" sources that published that nonsense will go unpunished and keep misleading you in order to steer you into another round of bad investment decisions based on their fake, Fake, FAKEnews.
- Apple is just as 'disappointed' with iPhone X sales as everyone else … (BGR.com)
- Apple is just as 'disappointed' with iPhone X sales as everyone else (Yahoo.com)
- Apple iPhone X Sales Tanked 73% In Q1 2018 As Buyers Prefer Old … (Dazeinfo.com)
- Apple Will Probably Report Bad iPhone X News Tuesday | Fortune
- Latest iPhone X Shock Reveals Apple's Growing Nightmare – Forbes
- Analysts ratchet down Apple iPhone X sales expectations ahead of … (Foxbusiness.com)
- With Apple iPhone X sales fading, Apple could be about to make a big … (phonearena.com)
- Slow Demand Forces Apple to Slow iPhone X Production | Digital Trends …
- Slower Than Expected iPhone X Sales Likely To Hurt Apple's … – NPR
- iPhone X blamed for Apple's slow growth in smartphone sales … (techspot.com)
- iPhone X's sluggish sales may mean price cuts are coming – USA Today
- Leaked report suggests Apple is canceling the iPhone X :: WRAL.com
- Wall Street braced for plummeting sales of Apple iPhone X | Business … (thetimes.co.uk)
- iPhone X Sales Are Less Than Half of What Apple Expected – Newsweek
- Apple iPhone X Sales Worse Than Expected, Says KeyBanc Analyst (Valuewalk.com)
- Apple to 'cancel iPhone X this summer due to slow sales' | Metro News
- The iPhone X isn't selling. Here's how Apple is responding. – VICE News
There are literally hundreds more of these. For those of us paying attention, it was pretty much all we heard for the last few months so it came as quite a shock to people who believe this kind of BS, that IPhone X sales were, in fact, fantastic and that AAPL has made record profits selling them.
I wouldn't say the publications themselves are out to mislead you but this (as well as the political fake news) is the result of years of cutbacks in news organizations (cause by the Top 1% Billionaires who have taken them over) that have left them empty shells with virtually no resources to investigate anything, which leads them to rely on information from 3rd parties, who are often working for or with the people who look to manipulate you into believing things that simply are not true.
As Hitler's Chief Propagandist, Jaseph Goebbels used to say: "A lie told once remains a lie but a lie told a thousand times becomes the truth." The Internet has made it possible to easily have a lie repeated 1,000 times – especially if you give it a better headline than the Truth – "No Collusion," for example because, as Goebbels also said: "If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself." Aside from the obvious use of this concept by the GOP, think about Bill Ackman telling you, and everyone else who would listen, how he had "evidence" that Herbalife was running some sort of illegal scheme. Carl Icahn called his bluff in the end, but not before HLF shareholders were massively harmed.
There was no point in seeking to convert the intellectuals. For intellectuals would never be converted… Arguments must therefore be crude, clear and forcible, and appeal to emotions and instincts, not the intellect. Truth was unimportant and entirely subordinate to tactics and psychology. - Joseph Goebbels
Herbalife was an example of blatant, public stock manipulation that we saw playing out in plain site but that is NOTHING compared to the BS that goes on every day, behind the scenes. Unfortunately, these days, manipulators can get anything they want published almost anywhere and news isn't news anymore because people insist on not paying for it, so the News Organizations have no money to hire investigative reporters – even if they wanted to. The reason the "Failing New York Times" is, in fact, doing great is because people like me, who value FACTS, are willing to pay a premium for a service that still provides them – and there are very few of those outlets left!
A good sports reporter is happy to make $70,000 and get free tickets to ball games but a top-notch financial reporter could be an analyst – and an analyst can make $250-500,000 easily. Papers simply can't afford to hire the kind of people it takes to analyze the information they get – so they run it all as if it's real. The same goes for TV news and the so-called "*Financial Media*" is actually worse, because they do what their sponsors tell them and they are "*not responsible*" for the views of their guests – to the point that they rarely even challenge them – no matter what nonsense they are spouting.**
Knowing that the majority of what you read and watch is nonsense is the first step to becoming a better investor. Don't make decisions based on any single source and try to read articles on both sides of the investments you plan to make and think about which side is actually making the most sense. One way to help this is to follow Warren Buffet's advice and only invest in companies you understand fully – too many investors buy stocks because someone else picked them or they came up in a screen, but they don't even actually know how the company makes money or what the key factors are in the sector.
That's just fine with the pundits as it keeps you loyal to them because they "know" about the stock but, really, look at your actual history with those people – do they really know anything more than you do – or more than a coin flip?
AAPL's earnings should give us a bit of a boost this morning but the pressure is still down for the markets and we have the Fed at 2pm (there will be a Live Trading Webinar at 1pm, EST) and I'm very concerned that no one but me thinks they are hiking rates today. If they do, it's likely to be a downside shock to the market and, even worse, Powell is not scheduled to speak afterwords, so there will be no spin.
Be careful out there!