Misleading, Sensationalized Headlines
Just days ago, Barry Ritholtz called out The Wall Street Journal for its (increasingly) misleading, out-of-context headlines.
I just ran into another example yesterday on the otherwise credible RealClearMarkets.com, which aggregates the top 30 or so business-related print and blog pieces daily (mine have appeared more than a dozen times in the last two years!).
Compare this headline on RealClearMarkets (look under “Evening Edition” for Jan. 26):
“Looks Like the S&P Is Going to 1,200 or Higher” — Jeremy Grantham
With this quote, directly from Grantham’s (excellent) piece:
I thought last April that the market (S&P 500) would scoot up to 1,000 to 1,100 on a typical relief rally. Now it seems likely to go through 1,200 and possibly higher. The market, however, is worth only 850 or so; thus, any advance from here will make it once again seriously overpriced.
Just in case the foregoing is too subtle, Grantham continues:
Equity markets almost always peak when rates are low, so moving in desperation away from low rates into substantially overpriced equities always ends badly.
See my point!!?
P.S.: If you haven’t read Grantham’s missives, you should; they’re every bit as pithy as Warren Buffett’s. In particular, his “Lessons Learned in the Decade” at the end of his most recent quarterly newsletter is full of great nuggets.
In fact, when it comes to “pithy financial insights,” these two are really on a plane of their own (Michael Lewis and Thomas L. Friedman also write at this altitude, but, unfortunately, they both cover business all too rarely).