Never base your financial planning on info presented by popular media. To use an illustration from the Rwandan genocide, it was apparent that there were early warning signs that were ignored. Evidence indicated that the international community knew that genocidal killings were being planned in Rwanda long before they occurred. When Lt.-Gen. Roméo Dallaire received the call to serve as force commander of the UN intervention in Rwanda in 1993, he thought he was heading off on a modest and straightforward peacekeeping mission. Thirteen months later, he flew home from Africa, broken and disillusioned, having witnessed the slaughter of 800,000 Rwandans in only 100 days.

When media downplays the truth

Similarly, (a) the media downplayed the initial information that the sub-prime lending could pull down the financial system due to the many banks worldwide that had purchased various high-risk mortgage-related instruments; (b) the media assisted the American banking system while banks hid the truth of their own balance sheets' instability over the year of 2007 until well into 2008, when the universal laws of algebra kicked in; and (c) the media pundits, interviewing the best investor minds such as Warren Buffett, pursued a phase of encouraging investors to buy, stating that the worst may soon be over, we may soon see the bottom, etc., and then (d) late in 2008, around Thanksgiving, bigger troubles loomed when giants such as AIG and Citigroup began to stagger (not to mention the world's auto industry); and (e) then came echoing cries from the likes of media guru Jim Cramer to sell. When lowered share values affected the balance sheets of large firms in latter 2008, we realized the truth that set many investors to selling their portfolios out of fear. If you follow the media, you could be long behind the truth of the matter. When the markets take off again, the media won't know or tell you until many contrarian investors are far out in the lead.

What will “media-ocrity” say then? And when will that be?