A Humbled Financial Press: Don't Believe What You See
There is a common perception that old news is worthless. I disagree. Old news can often teach you more about the future than current news.
Old news comes with a unique feature: The reader gets to judge its content, predictions, and analysis with the benefit of hindsight. Rather than asking," What does this mean?" in today's newspaper, you get to ask, "What did this mean?" in old news.
Earlier this month, I met with David Cowen, CEO of the Museum of American Finance, who provided a great example of the value of old news. Have a look (transcript follows):
Morgan Housel: So this is one of your favorite things at the museum. What are we looking at here?
David Cowen: What you're looking at is a newspaper with a great bold headline, Morgan, that the stock market crisis is over and it's dated October 25, 1929, four days before what we associate with the great crash. And what had happened to the market, it sold off the day before and rallied back to almost even, so they're declaring it's all clear. We both know four days later, it's going to start to fall apart and it's going to not recover for 12 years, right? And there's going to be a double-dipper session as well. And so what is the take-away from this is number one, don't always believe what you read in the press, or for that matter maybe on Motley Fool, but secondly, what's the job of newspapers? Sometimes we have to be careful as if to sell newspapers or to get the information that we really need out so be careful what you write as a headline because it may just not be true.
Morgan Housel: Don't believe what you see.
David Cowen: There you go.
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