"ARE WE THERE YET?"
It's been uncomfortable watching CNBC TV the past few days, since the Dow has been flirting with new record highs since 2000 (for the record, it was 11,722.98, reached January 14 of 2000).
Not because I don't like to see the market going up (I obviously do as an investor).
Not because I don't like to see records being broken (it's always important to note passing milestones).
Not because I don't like to see CNBC get more viewers on the back of a more mainstream story (CNBC remains my favorite TV network during market hours).
But because the CNBC crew seems to be "partying like it's '99" in recent days, especially on it's morning shows like Squawk Box and Power Lunch.
Too much focus is on almost tick-by-tick coverage of that one sound-bite (Dow hitting new highs), and too little on the overall context for investors. As a case in point, look at the top few headlines this morning off it's web-site:
That's four out of five focused on the Dow, as of 11:45 am this morning (EST), while the fifth obviously is also focused on stock market directionality.
It's a classic example of how the mainstream media has a tendency to over-does a story in it's enthusiasm to cover it, be it positive or negative.
The CNBC coverage has been particularly giddy in the types of stories the network has covered in recent days.
An example yesterday was a "Power Lunch" feature on executives taking a 4-minute, $2000, helicopter flight, ferrying themselves from their corporate jets in Teterboro, N.J., into Manhattan's East side. The example used had executives going to a lunch at the Four Seasons.
It's a little early for all this hoop-la, especially since the broader market averages like the S&P 500 and the Nasdaq, are far from any kind of highs reached in 2000 or any other time.
The current record environment is restricted to the Dow, which only represents 30 stocks, and is highly sensitive to big movements in individual Dow components. As Merrill economist David Rosenberg notes in a timely piece:
"...the average Dow stock is still down 34% from the prior high and the median is down 39%. Not only that, but consider what it means to go back to levels we last saw 6-1/2-years ago – it means no net change over a span that saw the Treasury market generated a total return that exceeded 50%.
Not only that, but take inflation into account and in real terms the Dow is still 14% shy of the old record. And since this is still just a composite of 30 stocks, call us when the broad S&P 500 reaches the milestone - it has 14% (or 188 points) to go still."
It'd be nice if CNBC focused on the broader context and perspective for a change, for the sake of it's mainstream audience.
P.S. I'd like to thank my friend Bill for helping coalesce the various reactions I've had to this story this week into this post.