Traders Profit Best by Ignoring Most Financial News

Yet like it or not, financial news is hot and getting hotter. In the last few weeks alone, News Corp. (NWS) launched a massive bid for Dow Jones (DJ), parent company of The Wall Street Journal and co-owner of SmartMoney.com, and Thomson (TOC) announced a deal to buy market-information company Reuters Group (RTRSY) for $17 billion. CNBC is once again on in bars and health clubs around the world, and Conde Nast launched Portfolio, a glossy new monthly magazine. Indeed, when it comes to financial news and information, there's more of it than ever.

For me, this sets up a bit of a quandary. Because while I'm passionately interested in the market, I'm compelled to do everything in my power in avoid reading, hearing or talking about it. Regular readers know exactly why: The more I hear what others think of the market, the more likely I'm going to be influenced, no matter how strong my discipline.

If you'd ever been asked not to think of a pink elephant, then you know that's almost always one of the first things that pops into your head. Much to my dismay, the same holds true for investing. So if I read article after article about how promising China is, about how there are still millions of folks who've never made a telephone call and about how stocks like China Unicom (CHU) and Baidu.com (BIDU) are must-own names, I simply can't help but be influenced. Even if I don't buy those names, the exposition itself has an effect on me. It could be as subtle as the hesitation to sell a losing bet in an unrelated emerging market that, had I not read the article, I would have been much quicker to dump.

So I don't subscribe to any newsletters or read any analyst or brokerage research. While I'm told there are very entertaining shows on CNBC, shows you'd want to watch even if the market was bad or there wasn't a particularly pretty female host, I avoid them like the plague. I do watch Fox News Channel, but specifically avoid the business programming and literally turn off market updates I happen to catch. The only business TV I watch is the 22 minutes a week on which I appear.

You might be surprised at what I do watch: hour after hour of the Food Network. Indeed, I've literally never seen "Mad Money" or "Bulls and Bears," but I wouldn't miss an episode of Ace of Cakes, a reality show on the Food Channel about a hip pastry chef and his gloriously Gen-X Baltimore bakery. There's lots of talk about fondant and royal icing, but not a mention of interest rates or the S&P 500.

I used to stay up nights watching Bloomberg for the Asian and European market coverage, but now I simply cuddle up with a Hewlett-Packard (HPQ) laptop, wireless access and real-time quotes on everything from the Nikkei to the Norwegian kroner.

While I have plenty of respect for television business news, I simply don't want to be influenced by it — even by the order of stories they choose to cover. If an anchor leads with fancy graphics about the tech-stock rally and buries word about the falling dollar in the last two minutes of the broadcast, which story do you think you'll be likely to weight?

The printed word is not bound by a "hard out" commercial break, so I opt to read my financial news. Some of it is actually useful, and reading itself also happens to be relaxing and pleasurable activity. Like Alan Greenspan, I spend many hours in the tub with a stack of reading material about the financial world.