Who would you trust with your investments, Lindsay Lohan or Meryl Streep?

Let me explain.

I am a huge gossip hound, I don’t read People or US Weekly, but I do follow a number of gossip bloggers almost religiously. I love one in particular, not only because she’s highly entertaining AND introduced me to Fight Night Lights, but because her insights allowed an outsider like me glimpse into the cynical workings of the entertainment industry. How else could I have come to understand the dire consequences of plastic surgery addiction, passive-aggressive diatribes of an insecure diva, and the many layers of hidden media manipulation that’s unbeknownst to most of us?

Time and time again, the lesson that I take away from the smut is this. The IT boys and girls come and go, but the Meryl Streeps of the world do their jobs, go home, and wake up to see another decade or two of good works ahead of them.

Now, this is not a gossip blog, and there is a point to be made here, I promise. The thing is, just like an actor, an economist or analyst has a very long working life ahead of them (if they are lucky). And like Hollywood, the waters of Wall Street and the investment industry is just as treacherous. It’s hard to get ahead or get noticed in those ultra-competitive and dog-eat-dog kind of environment.

So when an analyst suddenly gets exposure by mastering some new trading anomaly or has a part of his or her research predictions come true, their status is swiftly elevated. It’s not unlike a starving actor in LA, rejected after years of unsuccessful auditions.  His luck turns, he unexpectedly lands a starring part in some Josh Schwartz hit show. And just like that, he becomes household name in a desirable demographic.

But Wall Street, just like Hollywood, is fickle. The media is always looking for a fresh perspective, much the same way Hollywood paparazzi are always on the look-out for fresh faces to sell pictures. The end motivations are the same: getting people’s attention, whether it comes in the form of a contrarian opinion or drunken debauchery on Rodeo Drive. Media looks for controversy, and there are always willing participants.

They are usually always too happy to be typecast in a role. Whether it’s the perpetual bull, perma-bear, or the new party boys and girls frequenting Il Sole. What they don’t realize yet, is the limited shelf life of their newly minted status, and how quickly the media will tire of them and hold auditions for the next cast when the time comes. It may be a new kind of show the audiences turn to, or it might be the market taking an unexpected turn for the better or worse.

Then, as quick as it came, fame departs, and the IT stars of yesterday will be forgotten. Squeezed dry of their appeal by their handlers, pigeon-holed in their respective niche, they are left fending for their careers by groveling on their knees for scrappy roles, or occasionally getting exposure by pulling stunts that capitalize on their fading fame.

Then you have someone like Warren Buffet. You can’t typecast him in any particular sectoral or trendy investment class, because he is in a class of his own. Because for half a century, he’s been the only thing he has ever claimed to be: a value investor. He did not dabble in anything sexy that modern finance dangled on a plate. He was not interested in making quick profits with complex leveraging instruments, he didn’t believe in beta nor the benefits of diversification for his customers, he was highly suspicious of mergers and acquisitions, and he disapproved of aggressive accounting standards. How straight-laced can you be, huh?

Do you remember the last time Warren Buffet went on CNBC and MSNBC to defend his investment views? That’s probably as likely as seeing Meryl Streep or Tom Hanks on the cover of gossip rags by the supermarket check-out. Why not? Because they were too busy doing their jobs to attract unnecessary publicity. And what do you do when you bunker down to do your job? You get respect, a rarely talked-about commodity that is sometimes more valuable than money. End of the day, these guys realize the career they have is based on value and substance, and not the ability to generate hype and controversy.

So why are so many analysts out there making the rounds with their one-trick pony show? Why are so many talented guys and gals chasing that illusive IT status that’s both unsustainable, and ultimately, self-defeating?

I will leave you this snippet from an interview with Meryl Streep not so long ago.

She sketches a frame around herself with her finger. ‘This is all you have, and the fewer compromises you make on this template the better off you are, I think. Especially when you’re young. I mean, I understand the economic necessity of doing something. But very early on you’re putting stuff into the world, so look at it carefully.’

Why cable business news will drive your investments into the ground

Where I used to work, we rotated MSNBC, CNBC and CNN Business in the background non-stop. Every market movement relevant to the energy market was followed, analyzed, and regurgitated on those channels. For the oil trading desk I worked next to, every threat of Iranian oil embargo, every possible hijacking off the Somalian coast, every Nigerian riot, would send the trading guys off in a flurry of activities.

Back in 2007, oil was trending up into infinity and beyond, and everyone was in a great mood. I don’t know about now. But my point here is, these kinds of reporting are great and useful.

For a trader.

But you are not a trader, are you? You don’t trade Forex or options for a living, do you? Because if you are an investor – and I define an investor as someone that holds investing instruments for the medium to long-term, then SHUT OFF the TV. They are worse than useless. They are downright detrimental to your investment portfolio.

The business reporting business, much like the regular media outlet, is like a stage. There is a cast of characters. They play their roles to the T, and they do not improvise. The networks themselves are self-serving media machines that get turned on for one reason and one reason only: to make a profit. Next time you see Maria Bartiromo, Erin Bennett or Becky Quick, you need to realize who’s paying their bills. It’s the advertisers, usually financial service companies that fill up these 10-20 second slots right after they tell you they’ll be “right back”. And who do they return with after the commercial breaks? Oh don’t you know it, it’s the in-house economist/strategist/analyst from those very firms.

Do you see what I see here? I see irreconcilable conflict of interest. I see many of those guests coming on the show with a very clear agenda in promoting a certain investment style, a sector which they are experts (and happen to do business) in. The intentions are not always malicious, but it does place a bit of a gag order on the interviews themselves. After all, should a disagreement arise, how far can an anchor go on challenging their guests’ positions, knowing fully well their counterpart is partially footing her salary.

And then there are those anchors that leave you scratching your head. These are the personalities that would be better off working in the pits of the Chicago Options Exchange. Because they seem to confuse their responsibility in covering useful business and economic analysis, with pulling hourly trading tricks out of the hat. Watch this (especially towards the end) and tell me there’s any integrity in what they are doing here. What’s the obsession with actionable items, are they trying to cure a rash? I don’t know if what they are selling is going to show up on some late-night infomercials, but I ain’t buying.

Lastly, there’s the experts themselves. Now given these are rational, intelligent analysts and economics that have swum against the tide and now at long last proven right. They come on the show with little to sell. What happens? Firstly, there’s very good research indicating that (much) more often that not, one year of correct outlook is usually not followed by another. So statistically speaking, the much celebrated genius you are watching on screen is probably going to be wrong in whatever it is that he is championing right now.

Secondly, there is the issue of ego. Imagine if you are an academic that has been writing papers on some obscure anomalies in the market or impending doom for years, floundering in relative obscurity. To be proven right all of a sudden, exalted to rock-star status, touted on cable news as the sage, paraded trough conferences like a peacock, what would that do to an average man’s ego? They may be genius, but they are still ego-centric just like everyone else, right?

It’s easy then to see how they could be affected by newly-found fame, attention, influx of respect and adoration. Not wanting to disappoint, or merely driven by stubbornness to continue being right, it’s no surprise that success in market predictions are rarely replicated, year after year.

So with all these: Conflicts of interest, confused role-playing, ignited by gigantic egos. Are you not better off by turning off the cable news? Pick up the FT or WSJ, brush up on the investment classics. There’s more than enough sense out there to keep your money safe.