FOOL ON THE HILL: An Investment Opinion
CNBC: Opening Bell

After a seven month layoff, Bill Barker returns to his self-appointed mission of watching an entire day of CNBC's coverage. One of the tricks to watching CNBC is to remember that time is both linear and cyclical, though only one of those treatments is provided by CNBC.

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By Bill Barker (TMF Max)
October 31, 2000

Fourth in a series of annoyingly indeterminate length (and very sporadic scheduling), which examines the information available from watching the entire financial programming day of CNBC on May 27, 1999. See Parts One, Two, and Three for what happened before the opening bell that day, and the details as to why I stole the idea to do this from Bill McKibben's very highly recommended book, The Age of Missing Information. Other duties, including recently writing portions of our Roadmap to Retirement seminar, have prevented me from returning to this little exercise until now. My apologies to those that have been holding their breaths waiting to find out what finally happened that auspicious day...

When last we interrupted the action, I noted that Roger McNamee had just provided a very insightful interview on investing in technology stocks. Back in March I wrote, "Unfortunately, just as I'm settling in to listen to yet another useful answer, McNamee's interview is abruptly terminated by an event of such immense importance, such gravity if you will, that like a black hole it will warp the very notion of time, and prevent nearly all intelligent discussion from escaping." I was referring, of course, to the opening bell, now practically upon me as I finally plug my tape back into the VCR.

In the couple of minutes prior to the opening bell, actually, CNBC manages to get in three commercial breaks. The only information that is provided in between the commercial breaks is read to the camera by Martha MacCallum, who is today in the role normally filled by Maria Bartiromo. Her task is to simultaneously dodge moving bodies on the New York Stock Exchange trading floor (giving the appearance of urgency, activity, and excitement) while announcing a string of analyst upgrades and downgrades.

By some measures, this might be considered the low point of the day for CNBC. After all, the rest of the excellent Squawk Box group -- Joe Kernan, David Faber and Mark Haines -- are openly and appropriately contemptuous of Wall Street "analysts" and the lack of accountability attached to any of their work.

This contempt is apparently and unfortunately not shared by Bartiromo, who does not feel it is part of her job to assess whether the analysts are actually any good at their jobs. According to Howard Kurtz's The Fortune Tellers, "Bartiromo [doesn't] worry about whether the analysts issuing their upgrades and downgrades were right about the companies involved; that was beyond her purview. Let others judge the quality of their advice. Her interest was in getting the scoop and giving viewers the inside skinny before the opening bell. The information, she felt, had become 'commoditized.' "

Today, MacCallum is in the position of having to ignore whether the reports she is announcing as having market-moving impact are useful or not. Meanwhile a counter ticks down the remaining seconds before the opening bell. There isn't any reason to believe that the analyst upgrades are particularly good calls -- they just are -- and for that reason, as MacCallum informs us, these are "the stocks we'll be keeping an eye on."

When we come back from the third commercial break, we find Mark Haines worried. We're literally 20 seconds into the day's trading, and already "downward pressure" is being reported. A bunch of stocks are down halves and eighths from where they closed yesterday. We're back to MacCallum already, and she quickly rips off ten stocks in less than two and a half minutes that she's still keeping an eye on. After finishing her piece, presumably she's let off camera to go hook up to an oxygen tank, because I'm not sure that I got to see her breathe during her time on camera.

Next, it's off to Tom Costello for "details" on the "situation" at the Nasdaq. Costello obliges by naming about a dozen stocks and the number of points each is down so far in today's five-minute-old market. There is virtually no "detail" offered at all. It is simply the list of high-profile stocks and how far they are down today. There's red all over the place. Red, a color which is traditionally meant to anger the bulls I suppose.

The rest of the day will continue at roughly this pace: usually a space of literally two to three minutes is devoted to discussing the stock price action of maybe eight or ten stocks. Occasionally, a guest appears and the pace slows down. The expert will only have to discuss three or four companies in his allotted two and a half minutes to four minutes.

CNBC pours so much information over you that, of course, it isn't truly possible to process it all, or perhaps any of it. To the extent that there is context to any of the information, it is almost universally within the framework of how the price of the stock is different from where it was yesterday. Maybe classical presidential campaign rhetoric has infiltrated my brain, but I can almost hear the implied question that floats over every second of coverage, "Ask yourself -- are you better off than you were at 4:00 yesterday?"

CNBC is there to help you answer that question. Of course how your stock holdings are doing today as opposed to yesterday is one way -- and indeed even an accurate and interesting way -- of looking at things once in a while. If you're better off than you were at 4:00 yesterday -- that fact gives you some information, the kind of information that would be helpful if you view life, and your investing life, as a string of unrelated one-day events that have no beginning, midpoint, or destination. No particular destination except to have more than you did yesterday.

But I find myself learning more about the deeper reasons for investing (and having any success at investing) by flipping back to the seemingly unrelated pages written by McKibben years ago. McKibben notes in The Age of Missing Information:

"Human beings, of course, have perceived time in two main ways: linearly and cyclically. Either history advances forward through time or the world repeats endless cycles.... In the last hundred years, though -- and more and more all the time -- the linear view is stomping out the other set of information, which is as old as man.... In linear time the late summer ("the third quarter") of 1991 seems remarkably different from the third quarter of 1990. It is a year later, and woe to you if you haven't keep up with the times. The third quarter is not useful as a model but only as a baseline to measure your progress into the intervening twelve months. And the only acceptable result is to have more, because you don't know what's coming. It's not winter the way it's been winter all the times in your life -- it's the first quarter of 1992, and that may bring something altogether unprecedented, requiring you to have more. Not enough to say that if on the first of March you have 'half your wood and your hay, you'll make is safely through to May.' Because May is the second quarter of 1992, a time that's never been before."

Plotting out how much metaphorical wood and hay to store, and how to make it last through to May is the kind of thing we'll be covering in our Roadmap to Retirement seminar (let it not be said that CNBC is the only entity that puts commercials in the middle of its programming), but is something that isn't much touched upon during the day at CNBC. It is the cyclicality of time in our lives that eludes CNBC's relentlessly linear coverage.

This isn't necessarily a criticism. CNBC is, after all, a news station, and new things are almost by definition the type of thing that do not repeat themselves in endless cycles. There's a place for the linear in all of our actions, and new events do have some small effects on any of our nest eggs. But the ultimate reasons for most people to invest are intrinsically grounded mostly in the enduring and unalterable cycles of life: the need to put aside enough money today so that you can provide for a family, send your children to college, or live a comfortable retirement.

If you aren't well-grounded in some sort of cyclical understanding of time, though, you might find yourself buying into CNBC's very opposite message -- that the reason to be invested in the market is to experience today the thrill of victory (and the agony of defeat) of watching something you own scroll across the screen in green lettering, rather than red.

Even if that green demarcation only gives you happiness through 4:00 today.