CNBC Viewership in a Downtrend and a Good Example of Asymmetry vs. Symmetry

ZeroHedge points out that CNBC’s Nielsen ratings are at a 20 year low. In fact, they point out:

“CNBC’s Fast Money (-32% Y/Y), Mad Money (-42% Y/Y) and Kudlow (-52% Y/Y) all had all time low ratings in the “all viewers” category in August 2013″

Below is their Nielsen viewership total and prime viewers chart since 1992. You can see how viewership grew sharply during the bull market in stocks of the 1990’s. Viewers seemed to lose interest by around 2005 after the stock market decline from 2000- 2003 had recovered by 2005. No surprise their viewership trended back up and peaked around 2008 – 2009  when global markets dropped -50% or worse and negative news was at an all time high. Since the stock market recovery (driven mostly by the Fed’s Quantitative Easing I will add) their ratings have declined to a 20 year low. Fewer people are watching CNBC than ever.

I have related the swings in viewership to the directional trends and price volatility in the global markets. That may or may not be a driver of their viewership, but there seems at least some correlation. But, it seems that if the financial media like CNBC had strong credibility their  viewership would be more consistent.

Either way, after the 1990’s viewers have probably realized that financial media like CNBC is just financial entertainment – much like Sports Center, just a different game. People sit around a table with different views and debate what’s going to happen next and state their opinions. Most of the time you have no empirical evidence if their opinion even means anything – if you don’t know their track record. It sometimes gets outright silly. I’d rather watch Sports Center for fun – money management is a serious matter. It isn’t a game to me.

Finally, the chart below is a fine example of symmetry. Symmetry is balance. I always point out the error in people saying you should “balance your risk and reward“, when in fact we want imbalance. If we want something to trend up over a long time, we want Asymmetry: an imbalance between profits and losses. That is, we want more reward, less risk. Or, more profit, less loss. If your profits and losses are symmetry (balance) over time, you’ll have periods of gains followed by periods of losing those gains with no progress overall. For example, if CNBC were able to keep some viewers while just losing some, their chart would grow from the lower left to the top right with just minor dips along the way. Instead, we see their viewership has oscillated up and down. They have periods of strong viewership followed by periods of weak viewership that erases the prior growth. Over all it’s an symmetrical chart: it moves up and down over 20 years, but ends in the same place.

That may sound familiar as the stock market has done the same thing… and if your portfolio just tracks that market, so does your account. You may be “up” now, but that’s just because the market is “up”. What happens if the market goes down -50% again over the next few years? Will you have symmetry?

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Source: Nielsen Media Research

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