Chicken Little and newsletters

On the Internet, on talk radio, there is a group of folks I term the Chicken Little chorus. They are always around. However, every couple of years, events raise their calls to a loud rattle, as they go about yelling "the sky is falling, the sky is falling." For most of my adult life, I can remember event after event, issue after issue where the Chicken, in various incarnations told me that the economic world was coming to end.

Here's a list of some prior events: the trade imbalance with Japan (mostly autos), the 1987 stock market crash, NAFTA, the first Iraq war and hype about elite Iraqi troops, the UAL takeover failure, the dot-com stock bubble and bust, ENRON, Worldcom, hedge funds going belly up. With each of these events, the Chicken told me the end was near and the reasons why. These days, subprime, the Chinese trade imbalance, and derivatives seem to be the hot topics.

Perhaps one day the Chicken will get it right, and the sky will fall. However, those that wait for that day, often live dim, dismal, joyless lives, in the shadow of paranoia, where most markets are manipulated, as are all news sources, except some two-bit newsletter writers that make their living by selling fear (not trading the markets).

I sheepishly admit that in my younger days, I felt a strong pull to the siren call of the doom and gloom being sold by the Chicken. The most extreme voices suggest buying gold, guns, ammo, food, and finding a bunker to live in. I find that there is a lot of really bad information being passed around the Chicken Little crowd. Don't believe the Chicken, especially when the Chicken has a newsletter to sell.

There are a lot of smarter folks than newsletter writers. If the newsletter writer is so smart, why does he/she have to hawk their newsletter to earn a few extra bucks? As always, if a reader is really interested in a newsletter, check with the Hulbert Financial Digest to get an audited track record. If they don't have a track record, the newsletter may be more in the entertainment category than the investing/trading category. That's fine for folks seeking entertainment, but not for folks seeking good useful ideas about where to invest real money.