Watch Out: How text random girls Is Taking Over and What to Do About It

Posted by Allyson on June 13th, 2021

As the technology-heavy Nasdaq market rose to stratospheric heights, nowhere was the cheering harder than in the investing chat rooms on the Internet. The many investors who helped propel new Internet shares to great heights crowed about their trading successes in these online forums.

Now, many of those same stocks have tumbled, and the mood in the chat rooms has shifted. Web sites like Silicon Investor, a financial site that serves as an online water cooler of sorts, are full of angry commentary about falling prices. And over the last week, chat rooms and message boards on the Internet have begun to fill with investors chastising television channels like CNBC and CNNfn for hyping the change in sentiment among investors that has caused a bear market for technology stocks.

This is not a simple and healthy correction in tech stocks, or a correction due to problems with fundamentals. It is a media-induced selling panic, said a note on one of Yahoos message boards by a user identified only as full-of-bull-2000.

Every time the tech stocks start a small recovery, CNBC puts on another bearish analyst that smears all tech and dot-com stocks as being overvalued, full-of-bull-2000 added.

Another investor, identified as porsche947, chimed in, Turn to another channel. I only look at the charts and cut out the TV press. The charts dont lie and have no editorial hype.

Another user, Night Owl Creative, added: In general, the media treats viewers as if they are dumb and it is their job to show them what to think.

The influx of novice investors during the markets climb may be one reason for the outcry against the media; many investors began to rely on the media for stock tips and market advice, several market analysts said.

Its natural that the media has been a market cheerleader, said Robert J. Shiller, an economics professor at Yale and author of Irrational Exuberance (Princeton University Press). There was always this intuitive feeling that the media should keep that warm feeling going about the market -- like it was almost unpatriotic not to.

Mr. Shiller, a self-described bear, was scheduled to appear on CNBC last Friday to promote his book. As the market plummeted, he appeared as scheduled but was also asked to appear a second time during the networks prime-time market wrap-up. Mr. Shiller acknowledged that appearances by people like himself have an impact on the market.

Bruno Cohen, senior vice president for business news for CNBC, said the networks coverage was not slanted. Were not cheering it up or down, he said. Sure were concerned about anybody losing money, but we believe more information is better than less. People have blamed the messenger for centuries.

Investors in chat rooms are also blaming industry analysts at brokerage houses for the decline. A lot of people got hurt in the process, a lot of lives ruined JUST BECAUSE some of these fund managers wanted to get some of their tech stock cheap resulting in a retail blood bath, a user called ciVic wrote on a message board on Silicon Investor. This recent market correction/crash/valuation -- whatever you want to call it -- had A LOT to do with the media and analyst comments.

A lot of investors believe the markets downturn was a result of predictions of a market downturn, said Jill Munden, a spokeswoman for Silicon Investor, referring to many in the chat rooms. They want to blame somebody.

Nonetheless, Mr. Shiller argued that even if they complained, most people will do nothing.

Its only the few who are on Prozac that have the impulse to trade, he said. They are the ones who are most overconfident in their own abilities. They typically think the market has to go up.

Indeed, many investors who frequent chat rooms and Internet message boards try to use the medium to bolster their stocks. A user called telecomguy said on a message board devoted to Cisco Systems on Silicon Investor: I still firmly believe high-tech is THE growth industry to be in for the foreseeable future. I will be scavenging for more buys in the High-Tech VALUE sector (which will be less of an oxymoron as the good companies omegle text will be punished along with the flakes in the next few months!).