I hate this scapegoating that is going on now with Jon Stewart thinking that it was CNBC's job to somehow use their magic prophesy knucklebones or something to warn people about the financial collapse.
Stewart has charged that people at CNBC knew what was going on behind the scenes on Wall Street but didn't tell the public. He has accused CNBC anchors and pundits of abandoning their journalistic duties and acting like cheerleaders for the market.
How was CNBC supposed to warn people about something that legitimate experts in the field had gotten wrong. I mean trillions of dollars in wealth have been wiped out in the collapse. People that looked like geniuses a year or two ago have been shown to have run Ponzi schemes or simply looked clueless. Hell, Fitch even downgraded Warren Buffett's credit ratings.
Only a handful of people were able to dodge the whole mess or even make money from it. The only one that comes to mind is John Paulson of Paulson and Co. who was able to short the subprime mess and the banks before the wheels came off. Even he lost 16% of his assets under management in the second half of 2008.
The majority of analysts were just plain wrong when it came to the credit markets and most of them still don't understand some the toxic assets that are still on the books of the banks. Just like when the tech bubble burst people like Mary Meeker were pumping Internet stocks right before they tanked.
It is the job of the individual investor to cut through the rhetoric and protect your own ass when it comes to the stock market. You can't just park your money in a 401K and let your investments go on autopilot. Just like you can't just watch Cramer and take his stock picks as gospel and hope to make money. They are just suggestions and you have to do the rest of the work. You must do Due Dilligence because you can only trust your own eyes and ears.
As they play every time they run a mutual fund commercial "investments may have risks and past returns are not indicative of future results." In other words the stock market is risky and it going up 20% doesn't mean it can never go down 40%.
Anyone who thought otherwise was fooling themselves into thinking that there was no risk or it was somehow reduced because they had a "long-term horizon." If you truly have a long-term horizon you should be pumping more money into the stock market. You can now buy some stocks at an 85% or greater discount, and if they aren't nationalized (and that is a big IF,) you might be in for returns you may never see again in your lifetime.
Just don't sell! Like Cramer has said over and over on his show the only reason you need to sell right now is if you need that money in the next 5 years. (I would add to that if Obama or Dodd talks about nationalizing your company and wiping you out then it would also be a good idea to sell as well.)
Don't let the Jon Stewart finger pointing at CNBC make you fear the market. Comedians usually give poor financial advice.
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