Janet Alvarez on Media Bias, Market Trends, and AI Innovations

Curious about the behind-the-scenes world of financial journalism? Join us as we sit down with Janet Alvarez, host of SiriusXM's Business Briefing, who shares her compelling journey from print journalism to radio. Janet highlights the different skill sets required for each medium and the importance of curiosity and analytical thinking. Together, we navigate the evolution of business journalism and the often-overlooked influences of political climates and editorial biases that shape the stories we read and hear. Janet also unveils the industry’s inclination toward negative, fear-driven narratives to captivate audiences.

Ever wondered how wealth disparities color perceptions of the economy? We address the growing divide between asset owners and non-asset owners and discuss signs pointing to a late economic cycle that could herald a recession. From top graduates struggling to secure jobs to heightened consumer price sensitivity, we provide a comprehensive overview of current economic conditions. Janet offers her insights into the market's defensive stance and the uneven impact on various sectors, while also considering how fiscal policies might extend or alleviate the late cycle phase, regardless of who holds presidential office.

Will AI revolutionize journalism and the stock market, or are there limitations to this technology? We explore the transformative potential of AI in these fields while acknowledging the irreplaceable value of human insight, charisma, and nuanced reporting. Janet and I debate the high valuations of AI-focused companies and the balance between diversification and high conviction bets. We wrap up with a discussion on the meme stock phenomenon and the role of prominent investors like Roaring Kitty. Aspiring journalists, take note: Janet shares invaluable advice on the importance of specialized knowledge and technical skills in the fast-evolving media landscape.

The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.

 Sign up to The Lead-Lag Report on Substack and get 30% off the annual subscription today by visiting http://theleadlag.report/leadlaglive.

Foodies unite…with HowUdish!

It’s social media with a secret sauce: FOOD! The world’s first network for food enthusiasts. HowUdish connects foodies across the world!

Share kitchen tips and recipe hacks. Discover hidden gem food joints and street food. Find foodies like you, connect, chat and organize meet-ups!

HowUdish makes it simple to connect through food anywhere in the world.

So, how do YOU dish? Download HowUdish on the Apple App Store today: Support the Show.

Transcript

Speaker 1: 0:08

My name is Michael Guyatt, publisher of the Lead Lagerford. Joining me for the rough hour is Janet Alvarez, who I'm sure many of you have heard over the years. Janet, for those who are not familiar with your background, introduce yourself. Who are you, what have you done for your career and what are you doing?

Speaker 2: 0:22

currently your career and what you're doing currently. Well, hello everyone. It's nice to meet all of you. My name is Janet Alvarez. I'm the host of the Business Briefing, which is a daily national business show on SiriusXM. I've been hosting the Business Briefing oh, for almost three years now. So many of you who follow Michael Gayad might also have had the opportunity to tune into my show. It's also a CNBC contributor, so you might have seen me on CNBC, on Telemundo. Over the years I've done a lot of stints in financial journalism. I used to be a business editor of the Philadelphia Inquirer, managing editor of Mintcom, I was at Reuters, at the Street with Jim Cramer, so I've been all over the financial media landscape.

Speaker 1: 1:04

And I'm happy to be on today with Michael. How hard is it transitioning from business journalism in terms of writing, copy, doing analysis like that to interviewing? It's a very different skill set, I find.

Speaker 2: 1:15

It is a vastly different skill set, but the one thing they have in common is just having a general disposition towards curiosity. I think every good journalist, every good interviewer is somebody who's naturally curious and actually wants to learn something and then be able to share what they've learned. They say listening is an essential skill, but so is just inherent curiosity, the desire to learn and then impart that learning and then just to transfer essential skill sets like analytical skills, the ability to discern what's material to a story and what isn't. Those are the sorts of things that I think enable you to transfer from being a print journalist to being able to interview effectively.

Speaker 1: 1:59

All right. So you've done this for some time and I think it's fair to say that business journalism You've done this for some time and I think it's fair to say that business journalism maybe over time has increasingly become much more opinionated. In general, it's no different than traditional news media. Walk us through the pros and cons of that, because I think the issue is. A lot of people, maybe correctly, argue that the media has too much emotion and too much bias, but in reality you kind of need some of that because, let's face it, talking numbers is boring, you know, it's really contextual, it really depends on the political environment you're in.

Speaker 2: 2:32

So about five years ago I used to be the morning anchor for WHYY, which is the NPR station here in Philadelphia where I live, and NPR, you know, sometimes gets lambasted as being left of center. But actually NPR was intensely, intensely aware of the political climate we were living in at the time, which was very critical of the media. There was a lot of, you know, talk of fake news and a lot of distrust of media and reporters, and so NPR would give us media trainings on a regular basis on how to be centrist, how to try to remove bias from your reporting, how to just report the facts. So there are political environments like the time we were in five, six years ago, that era, where trying to be as centrist, as unbiased as possible is doubly important. It's always important for a journalist to report clearly, to report purely facts, but at that time it was doubly important to sort of emphasize that you were unbiased and to try to seem above the fray. But times change and when times change then there's a place for reporters who are just reporting the facts, hard news, and there's a time and place for political commentary, opinion, financial commentary.

Speaker 2: 3:42

Where I think there's a little bit of difficulty is the gray line in between, is what people perceive as hard news that's being reported with the bias, or when hard news is being reported with a political angle or financial angle. And that's what's difficult, because reporters, journalists, we're human beings. We can get all the training you can give us on removing bias, on removing our personal perspectives from what we report. But editors, interviewers, anchors still have the ability to essentially select what they can report on and that's where I think the perceived bias comes in. They make a lot of jokes about what's the headline today on CNN versus what's the headline today on Fox, and it's in the headlines headline today on CNN versus what's the headline today on Fox. And it's in the headlines. It's in the news that gets reported where I think you see the biases or the perceptions of those particular journalists or editors shine through.

Speaker 1: 4:34

When I hear the word bias, my mind goes to you know, what creates a bias is also incentives.

Speaker 1: 4:39

All right, and I haven't seen on Twitter, slash X, people that take screenshots of YouTube thumbnails of you know very popular shows that are on there and the thumbnails all look very negative, right, it's all doom and gloom and bearish and people use it as an indicator that sentiment is still too poor, which means we're still going to go higher.

Speaker 1: 5:00

I say that because it does seem like there is a bit of an incentive and not necessarily to the journalist's fault to maybe tilt more on the negative side, because fear sells, right? I mean, the YouTube algorithm likes it more in terms of what it puts it out. I remember when I used to write for MarkerWatchcom they made it I always got many more page views on volatile days, which of course meant there was always an incentive to tone wise, maybe have a little bit of concern in the way things are expressed. Do you think there's validity to the idea that you know, sort of industry wide, there is that incentive to just maybe tilt more on the bearish side, more on the negative side, because that is what gets more views and more on the negative side, because that is what gets more views.

Speaker 2: 5:49

That's a difficult question, because the incentive, ultimately in print journalism and also in video and audio journalism, is to just get eyeballs, ears right, to get clicks, to get people to tune in, whatever the metric is on that particular medium. And, as a journalist, what we're trying to do is to get people to listen, to click, to watch, and so, whether it's bearish or exceedingly bullish, I think where the bias is, where the tendency is, where the incentive is, is to be a little bit to tilt harder in either direction, to either be a little bit more alarmist than you should be or perhaps to be a bit more of a cheerleader than you should be, because you're trying to create interest. And, let's be honest, when you write a headline or when you promote a podcast or when you promote a video segment, you want to create interest, and so the incentive is also you know how do I phrase this, how do I word this, how do I present this that gets people to go? Uh huh, because you only have a few seconds to get people to want to read your story or to tune into your radio or TV program, and so I think that you will find that in good times the financial media might cheerlead more than they should, and in bad times they're probably more alarmist and more pessimistic than they should. And I think back to the financial crisis. I think back to the heights of the COVID pandemic, when financial media did an excellent job of reporting all the difficulties and all the crises that our country was facing economically. But if you just tuned into the financial media alone and didn't tune into anything else, you might have really thought the sky was falling down Right, because our tendency was to kind of I don't want to say over-report, but over-emphasize negative.

Speaker 2: 7:26

Why? Because it mattered to us. I mean, that's the industry we're in. We're in financial news. We care. Maybe we care more than most when a bank collapses or when GDP declines. That's our business, we care about it. But also because we know that we have to drive interest in our stories. So, to answer your question more briefly, more succinctly, I think it's just a matter of you know, in a short attention span, news economy, getting people to tune in, getting people to click. How do you get people to get interested? You get people to get interested by writing a headline or presenting an intro that grabs your attention and sometimes that's excessively cheerleading, and sometimes that's excessively cheerleading, and sometimes that may be a little bit more alarmist.

Speaker 1: 8:10

Okay, so I've interviewed I don't know over 600 different people over the last two years, and I'm sure you've done more than that, just given that that's one of the things you do from a professional perspective. I do this just for content generation, trying to get people to think differently. I am sure there are plenty of people you have interviewed with that you vehemently oppose in terms of the way of thinking. Right, I know I do right and, as a respectful host, right, I always try to listen and even though I disagree with things that are being said that I know are wrong, I'm curious from your vantage point. You talk to all these experts in quotes. Most people, as you know, talk macro, because that's more easily accessible than talking levels and trading language, so to speak. Has there ever been a guest or a series of guests that you just said to yourself there's no way this person is right about how they're thinking about the future, talk about sort of those sort of more personal reactions.

Speaker 2: 9:11

I have interviewed so many senators, governors, fortune 500 CEOs, professors, heads of macro for big banks. What all these people have in common is that they're really bright. All of them are really bright, and it would be. I would be remiss to say that any of them were completely wrong, because they're not. You don't. You're not that smart and you don't get to be that accomplished by being just flat out wrong.

Speaker 2: 9:37

I think that is an asinine and ideological viewpoint to take as a journalist. What is true, however, is that I have had guests with whom I vehemently disagree, as you mentioned, but I'll tell you a funny secret I find the most ideological guests sometimes to be the best guests to have on the show. The people who have a really strong viewpoint, who are really passionate about something, who you might say, wow, they're really left wing or wow, they're really right wing, tend to have the purest, clearest opinions, the clearest convictions, tend to present them with the most passion, tend to make the best guests, and so, purely from an informational perspective and secondarily from an entertainment perspective, I really value them, first and second, because I try not to interview people who I don't respect intellectually. All these people are smart, they have vastly different viewpoints and the best I can say to you is, when I disagree vehemently with somebody, I ask them questions and ask the questions respectfully and I try to understand their opinion and then I let them speak because it's not my job to tell people.

Speaker 2: 10:44

That's not my job to tell my audience to agree or disagree with anybody. It's my job to bring on the smartest people, ask them questions, let them speak and let my audience make up the opinion. What I've learned over many years in this career is to just be humble, to shut up a lot. Shut up and listen, because I'm working with, I'm interviewing a lot of people who are smarter than I am or better informed on their particular topic than I am, and, as simplistic and naive as it may sound, again, they didn't get to be that accomplished. They didn't get to be in the positions they're in because they're 100% wrong. So my job is to just elicit information from them, ask them good questions, shut up, listen, learn and if I disagree, let my audience make up their mind on why they should or shouldn't disagree.

Speaker 1: 11:34

You used the word opinion, which I always go back to anything related to the future as an opinion, because nobody knows, right? It's all just scenario analysis, right, I think, at the end of the day, whenever we're talking about the unknowable tomorrow. But I'm sure that you have your own opinion and thoughts on markets the last several years. Given that, talk to bulls and bears and people that are outside of markets as well, talk to me a little bit about from your vantage point as somebody who listens and talks to all these people. From your vantage point as somebody who listens and talks to all these people, where are we in the state of the world? And I say that you know, earlier this morning I put out a clip with this news headline that's been making the rounds for the last two weeks that you know, three in five Americans think we're in recession, and I unpacked that from a data perspective. Where are we? Are things really that great, or or are things just incredibly distorted from your vantage point?

Speaker 2: 12:30

Well, there's a macro and a micro way to answer that question, and it's a difficult one, right? Because I talk a lot on my show about anecdotal experiences I have with the man on the street, with what people are telling me, their perception, right, and so I'll get in an Uber or Lyft and the driver will be telling me that the economy is doing really poorly, right, and I'll try to get in a conversation with them and often the conversation is too academic for the purposes of a Uber or Lyft ride. I'll try to explain to them that unemployment is historically low, that we're in the longest stretch of sub 4.0% unemployment since the 1960s, that wages have outpaced inflation and so therefore, even if things are more expensive, they're making more money. So it kind of evens out, but it doesn't register with most people. The people who perceive the economy as doing well are asset owners. People who have wealth have, of course, seen their wealth inflated in recent years. If you own a house, your house is worth more now. If you own stocks, your portfolio is worth more now. People who don't own assets, though, perceive a vastly different economy, and so I think the chasm that you're picking up on, michael, is the one between asset owners and non-asset owners, and non-asset owners comprise a very significant portion of our population. Those people have every right to feel negative about the economy.

Speaker 2: 13:53

Personally, my personal sort of journalist sort of academic perspective on where the economy is right now I think we're late cycle. This is purely my opinion, purely my conjecture, based on what I understand. What I see, we're late cycle. We're probably on the brink of something like a recession or some sort of slowdown. What I see, anecdotally, are graduates from top schools who are having a harder time getting a job right now than they have at any point in the past decade. What I see are consumers who are starting to become more price sensitive and say I don't know if I want to take that expensive vacation to Costa Rica this year. What I see is a labor market in which there's less turnover, signaling either that employees don't want to hire employers don't want to hire new employees, or employers don't want to leave their jobs. My personal opinion is that we're late cycle. I think the popular opinion that you're talking about, though, is that differential between asset owners and non-asset owning people in our economy and the vastly different experiences they've had over recent years.

Speaker 1: 15:31

So I haven't agreed with you on the late cycle point and I think a lot of market movement currently confirms that, just given some of the more defensive posturing that's taken place. I've noted, for example, that if you look at consumer staples stocks the need sector of the stock market relative to the want stocks consumer discretionary those have actually been outperforming all year, which is typically what you see late cycle. But if it is late cycle, that seems very unusual in the sense that a lot of stocks haven't made you highs, right. I mean, we've talked about this before on your show. There's a certain number of stocks which are propelling the equity averages higher NVIDIA in particular, the market capital averages but something like 70% of stocks in the universe are still below your 2021 peaks and if you're late cycle, it's going to be a lot harder, obviously, for them to overtake that. So is there a message there as far as what looks like two very different markets relative to where we are in this cycle?

Speaker 2: 16:34

Yeah, and I think that goes back to what we were just talking about is the haves versus the have-nots, asset owners versus non-asset owners. I think the real economy is slowing down. Of course, markets don't track the real economy perfectly, and so you might have a scenario in which you have an economic slowdown where, you know, using the SOM model, you get, you know what will constitute a slowdown in the labor market, will constitute a slowdown in real GDP, but the market may not feel it entirely. And so what we've seen over the past few years especially in 2022 and 2023, we had what were called at the time sort of a mini rolling recessions, right where you had the crypto winner, then you had, you know, weakness in commodity stocks and you had sort of a little bit of a weakness in housing, and you had the crypto winner. Then you had, you know, weakness in commodity stocks and you had sort of a little bit of a weakness in housing and you had different sectors of the economy kind of taken on the chin, but never all at once, so you never got a frank recession.

Speaker 2: 17:30

I think we're still experiencing something like that, and I think that whatever happens to the market is not going to happen in one fell swoop. I don't think you're going to get this. You know, like 20, 30 percent correction that some people have called for. I don't think that's going to happen, at least not anytime soon, at least not unless there's some sort of black swan event, some credit event, something like that, that triggers it. When I say we're late cycle, I think we're late economic cycle and I think for the assets that are vulnerable, or late cycle. So I think obviously, you know tech is a place that we can point to. I think financials are late cycle in some areas as well, but I don't expect there to be this sort of like concerted, coordinated slowdown in the market all at once. I don't see that it didn't.

Speaker 1: 18:15

It didn't happen on the way up and it's not going to happen on the way down either see that it didn't happen on the way up and it's not going to happen on the way down either. So I guess the question then becomes if it's late cycle, can the fiscal side counter?

Speaker 2: 18:28

or extend.

Speaker 2: 18:29

How late that cycle persists right, we talk about that a lot. I mean how the fiscal side is the elephant in the room that nobody's really talking about. Everyone's hyper-focused on the Fed. They's hyper focused on the Fed, they're hyper focused on AI, they're hyper focused on the productivity story. Nobody's talking about fiscal policy.

Speaker 2: 18:43

And the truth is, no matter who's elected in November, whether it's a second Biden or a second Trump presidency they're going to enact pro cyclical fiscal policy, meaning they're going to pump, pump, pump, pump, pump and whatever the Fed does next again, barring unforeseen circumstances, it's unlikely to be an increase in interest rates. It's likelier to be a decrease in interest rates, much likelier. And so you have this situation in which you're going to keep getting the pump. The question is, is that pump going to be something that sustains the cycle, as you say, or whether it's going to be something that sort of you know trips some part of the economy, whether it's through reigniting inflation, or whether it's through creating dislocations in asset markets that are unsustainable, or whether it's through, you know, through politics, where we have another debt ceiling scenario or more credit downgrades and that creates some fear in the economy? I don't know. I just know that the fiscal side of the equation isn't helping matters, but the fiscal side of the equation is what has propped up the economy this far this long.

Speaker 2: 19:56

I think the Fed gets lambasted a lot for the inflation that we experienced in recent years, but what people don't remember as well is that both administrations both the Biden and the Trump administration have almost equal blame to carry, because they enacted very aggressive fiscal policies, in both terms, that have only exacerbated the situation. You know the question is what helps more than it hurts? I don't know that low interest rates Let me rephrase that I don't know that low interest rates were any more inflationary for the economy than the fiscal policy that was enacted. Right, and I think there's almost equal culpability to do there. And I think you would have to be engaging in a much more sophisticated game of macroeconomic analysis to be able to parse out the question of where should there have been more moderation more moderation at the Fed or more moderation in fiscal policy.

Speaker 1: 21:06

I don't think that's an easy question, hans. Is there any hope that the public wises up to that? I mean, look, the reality is everyone always wants their free candy, right? They always want it. That's what you vote for. Right, you're voting for more, but I would think at some point, whether you're a Republican or Democrat, you're going to start saying you know what? This is actually, why milk is rising at the pace.

Speaker 2: 21:28

It's rising Exactly. And look, the people who listen to my show by and large will say you know, let's slow down on the spending. You know the fiscal policy is there's too much largesse, let's slow down on the spending. And they'll say, oh, and, both parties are equally to blame, republicans and Democrats are equally to blame. But these are the same people who want a rate cut as soon as possible.

Speaker 2: 21:49

And, frankly, I don't see how you can hold both positions simultaneously.

Speaker 2: 21:56

I don't see how you can say, well, government, stop spending but hurry up and cut rates, except for the fact that cutting rates inflates asset markets more easily, whereas government spending benefits, you know, small businesses, individuals, the lower middle class more.

Speaker 2: 22:15

So I think we have to look at ourselves honestly in that regard and to say you know, is what I'm advocating for? Is what I want to happen from the Fed congruent with what I want to happen from the Fed, congruent with what I want to happen from our government? Because both are inflationary, both are largesse of one form or another. They just tend to inflate different parts of the economy, and so I think we cheerlead the type of inflationary actions, whether by the Fed or the government, that tend to benefit us most. And for the investor class, for the sort of people who listen to my show or might listen to yours, we care more about the Fed cutting rates because it benefits us more, but for the lady driving the Lyft I was in a couple of weeks ago, she cares more about the government spending. It's what benefits her and that's, I think, the economy we're in now.

Speaker 1: 23:03

In a nutshell yeah, it's hard to see how that ever ends, right? I put out a clip from Milton Friedman from many, many, many years ago where he basically likened the fiscal spending to alcoholism. Right, it feels good when you're doing it, but then there's the hangover, and that's why people keep on drinking, because they never want to go through the pain, which is difficult in the short term, but obviously much healthier in the long term. They never want to go through the pain, which is difficult in the short term, but obviously much healthier in the long term.

Speaker 1: 23:31

You had mentioned that you're anecdotally, more graduates are finding it harder to find quality jobs. What's it called? I want you to unpack that a little bit, because the narrative that's out there which I think you mentioned earlier, is unemployment is. You know, everything's fine and robust, but I think a lot of people that are out there seeking jobs are finding it hard to find the right kinds of jobs that not only they enjoy but also pay them a livable wage, right? So talk about that and talk about how AI plays into that, because that's the other big fear, I think.

Speaker 2: 24:04

So I think the fears around AI are overblown for the moment. For the moment, by the way, I think your job and my job might be toast someday, right, but I think that's overblown. I think, right now, ai is presenting an opportunity for college grads, who tend to have skills related to AI more often than non-college grads and I say more often because we know the two are not mutually exclusive grads and I say more often because we know the two are not mutually exclusive. I think that AI right now is an opportunity for college grads. I think if you can build any skill set around that, that makes you immensely employable at the moment. But you know that's not the case for everyone. Not everyone has that sort of skill set or went to college to study those sorts of things. But yes, anecdotally, I live in Philadelphia. I live near University City, surrounded not only by Penn but also Drexel and a number of other institutions of higher learning, and what I'm hearing from the young people is that they're having a harder time finding jobs or the job offers they're getting are scarcer or are paying less than their peers last year might have been offered. And so that's just an anecdotal data point To a bigger point regarding AI.

Speaker 2: 25:09

I've had a number of guests on my show in recent days talking about AI regulation, where we are in the AI cycle. How early in AI are we? Is this 1995 or is it 2015 if you try to draw analogy to Web 1.0? And I would say we're very early, very, very early in the game. No-transcript to almost anyone who can capitalize on it in any way, shape or form. So I'm not afraid of it right now.

Speaker 2: 25:55

The fear is something that I think will develop in coming years as AI becomes more sophisticated, as the players become more aggressive, as the regulatory oversight takes hold in greater earnest. I think that's when the fear will come. Now, regarding employment, you know the official figures we've been seeing have been showing softening. Anecdotally, we've been seeing softening and I think what past history teaches us is when you start to see a slowdown in the labor market, it starts slowly at first and then it starts snowballing and that snowball effect accelerates and then boom bam. It's something that everyone can see and it's something that the data shows clearly. So my concern right now, as I mentioned earlier, is that we're late cycle for the economy, is that the data that we're seeing trickling in now is going to accelerate and I don't know if we're going to have a massive recession. I don't think we will, but you're going to see that true slowdown, you're going to see the pain in the labor market and it's just going to accelerate from here.

Speaker 1: 27:30

Since you said that you thought our jobs would be replaced, because certainly I hope that's not the case. But what I will say is Not yours, Michael.

Speaker 2: 27:38

You're much more entertaining than I am. I am easily replaced.

Speaker 1: 27:42

But I guess that's kind of where I'm going. Maybe I'm wrong. I don't envision a scenario where AI can I don't think you can code charisma, for lack of a better way of saying it.

Speaker 2: 27:55

You can't code charisma and that's why your job won't go anywhere, but mine will. I feel like a better way of saying it you can't code charisma and that's why your job won't go anywhere, but mine will. And the joke, you know? I think it's kind of true, just if you look at it, if you just look at the history of the journalism industry, if we're talking specifically about journalists, journalism jobs have been cut. I mean, I think we're like 40 percent of the number of employers on an adjusted basis, employees on an adjusted basis in the journalistic world, versus 2000. And that was just the advent of digital journalism. The advent of digital journalism alone led to these massive layoffs, led to this reformulation of the journalism industry, and what we learned is that a lot of us just aren't needed. You know, a lot of our work can be consolidated or easily replaced.

Speaker 2: 28:37

And I think AI is true, because think about how you get the news. 20 years ago, you probably watched the evening news at some point, right? You probably had a newspaper subscription, whether it was the Wall Street Journal or your local paper, whatever your ragged choice was at the time. You don't do that anymore. The way we get news now is through digitized environments where, whether it's an individual sharing it on social media or AI sharing it on social media is almost irrelevant. It's almost irrelevant, and so what happened with the digital revolution of journalism will also happen with the AI revolution. You can't code for charisma, and so I think that there will always be corners of the market that AI will be able to access, but on the large scale, we don't really miss Walter Cronkite all that much. What would you miss more If Walter Cronkite were around today? Would you miss him going off the air, or would you miss Twitter X being unplugged more in terms of getting your news?

Speaker 1: 29:40

I know what would be healthier from my mental state, which is Twitter slash X. But yeah, clear, your point is very well taken on that.

Speaker 2: 29:46

You'd miss Twitter, you'd miss the easy access to curated information, and that's what people like about digital news and that's what the AI revolution I think will intensify is it'll be personalized, curated information that you care about, and no amount of charisma can compensate for that, I think.

Speaker 1: 30:06

But it does go back to the start of the conversation around biases, because that's the other thing. As we've seen, some of these AI outputs do seem to have clear biases in their output, and it's sort of one of those things where it's like who's watching the watchers, who's watching who's coding the coders at the very top right, sure, so does that worry you at all? Sort of the idea that, okay, if we're getting more and more AI-driven news right and it's faster and maybe even more accurate, are there negative consequences to stakeholders right of that news, those that are reading it, because there could be biases they're not even aware of. And I would find that if you read something in your voice, it doesn't feel biased because it's in your own voice.

Speaker 2: 30:51

So I'm going to say I'm going to make a statement that sounds completely contradictory to what I was saying earlier, but just think about it for a second. As journalists, you know we get reminded frequently that your job is to report the news and nothing else. Your job is to report the news. One of the essential function of news people journalists though is to inform right, and informing doesn't mean just telling you one plus one equals two or the sky is blue. The role of informing for somebody who wants to know about the sky being blue is also giving them a little bit of background information. So when you read a good news story, it doesn't just tell you Jack and Jill went up the hill to fetch a pail of water today. It tells you an earlier Jack and Jill had negotiated an agreement whereby they decided to go up the hill in lieu of going to fetch water at the lake. It gives you the essential background information you need so that you can understand the information that's presented to you.

Speaker 2: 31:52

Ai can do some of that, but not all of that.

Speaker 2: 31:54

It can't do the essential deep reporting that's necessary for good journalism, to get the thinking and the opinions behind the thought leaders or the people that made the news or the people that have the inside information.

Speaker 2: 32:06

And that goes for everything from science reporting, where you want to actually be able to talk to the biologist or whatever kind of scientist is working on the technology or reporting on, to financial reporting, where you want to go talk to the leaders in the finance space and get their thinking, get their opinions, because they're what they're the ones who are driving markets. Ai can't do that and, to the extent AI can't do that, it's bad for AI driven news, it's bad for AI driven information, because then what you're getting is just the sky is blue, but you're not getting the context that you know. This is what had to happen for the sky to be blue, which is what good reporting is about. Good reporting is not just about presenting the facts, but it's presenting you all the context, the varying opinions around that context, the thinking behind that context. That then enables a good reader or a good listener to go and make up their own mind about it. If you're not given that context, then that's indoctrination, in my opinion.

Speaker 1: 33:07

So somebody graduates with a journalism degree wants to get into that career at this present time. Would you advise them to not do that?

Speaker 2: 33:17

I mean, if we're thinking very long, term, I would advise them to not study that. I mean, if we're thinking very long term, I would advise them to not study journalism.

Speaker 1: 33:21

No, but that's kind of no seriously, because I think if it sounds like you're fairly confident that this is sort of a secular decline, I think what we know of as journalism today has had look, it's changed dramatically in the past 20 years, right?

Speaker 2: 33:40

No, I mean, nobody in their right mind would have thought 20 or 25 years ago that we would be getting our news from our friends on social media. You know, because that's how most people get their news nowadays. Most people, when they wake up in the morning, don't pick up the Wall Street Journal or the New York Times. They go on their social media and they see whatever their friends might have posted and they might be talking about a story or they might be sharing a story. I think the revolution that is to come is going to be partly AI driven, and so a lot of it is going to be sort of consolidation of information, curation of information. Some of that is already happening, some of it we're already familiar with, and I think there's going to be more fragmentation in the way we receive information, but also more verification. So technology in short, what it has enabled us to do, is to verify more information more clearly.

Speaker 2: 34:30

We were reporting on a war 30, 40 years ago.

Speaker 2: 34:32

You can think about Gulf War I, where CNN was the pioneer in war reporting and everybody had CNN all the time to watch the Gulf War.

Speaker 2: 34:40

By the time we've gotten to the Ukraine conflict now, most of the footage that we have of the war is of people taking it themselves with their cell phones right and being shared on social media. But social media technology, ai, has now developed ways to sort of curate, verify, validate that user-generated content, so that more and more types of content can now be seen as legitimate, validated and as actual news. 40 years ago, if I had taken out my camcorder and recorded a bomb going off next to me, the New York Times would not have put it on the front page. Now, if somebody with a cell phone gets a good enough video of a bomb going off, it might make front page news because now it can be validated, it can be verified, and so news is becoming more fragmented but at the same time more cohesive because more information can be validated. It's a long-winded way of answering that, but if you think about it for a second, it might ring true.

Speaker 1: 35:41

It's a question from somebody watching live, which I think is a good one. Do you believe AI and all the talk from CEOs in all their earnings calls? If that's what's keeping the market afloat currently Meaning, if we are a late cycle, the markets are ignoring it because algorithms are just seeing AI referenced in these earnings transfers.

Speaker 2: 36:02

Yes, I think so. That is my personal opinion. That's a reasonably educated opinion, but that is my personal opinion. And I also have to say I'm not sure that the valuations on a lot of these stocks are wrong. The valuations are exceedingly high and they can't stay that high forever. But you tell me that NVIDIA isn't the most important company in the world right now. I mean, they're more important than Amazon or Google were 10, 15 years ago.

Speaker 2: 36:38

Why shouldn't these stocks be the ones propping up the market? Why shouldn't AI in general, as a theme or as an industry, be propping up the market? Because it's revolutionary and it's early stage and everyone's investing in it and it's accretive to earnings. It's starting to show that it's accretive to earnings for companies and it is the big growth lever right now in the US economy and in much of the Western world. Why shouldn't it be the big catalyst for the market right now? I think it's reasonable, completely logical, to be a little bit concerned that there's over concentration right now in the market, that the breadth of the market is very limited, and so forth. But it's also completely reasonable to think that they're right, that the people who are betting on AI are right, and if they're right, then you should hold your positions. Stay invested in AI, because even if you get a little bit of a drawdown, it will inevitably have to go back up and reach higher highs.

Speaker 1: 37:41

I'm curious for your own portfolio. I mean, as I understand it, most journalists, yeah, they're just in Vanguard type fund because there's issues if they're doing individual stock selection. But how do you yourself invest, given all this information that you come across, that you listen to from all these guests you interview?

Speaker 2: 37:58

So these are all my personal opinions and my personal choices, which are not applicable to everyone. Do not constitute financial advice and every other disclaimer I can ever, anyone's ever, heard.

Speaker 1: 38:09

That's a real pro, by the way, folks, because that's exactly what you have to say in this industry, so sorry.

Speaker 2: 38:17

I worked in the personal finance space for a long time educating people about diversification. Invest in your 401k, get your company match traditional 60-40 portfolio all the traditional rule of thumb personal finance investing advice you can give people, which I think is still really good advice. I think that if everyone followed that advice, we'd be a much wealthier, healthier country and we'd have brighter financial futures. With that said, personally what I have observed and what I have learned are that it's the high conviction bets that really make you money. Diversification's purpose is to save your butt during a down year, and so if you have a really bad year on the market and you're appropriately diversified, you're insulated or you're protected to a large degree from that drawdown. And that's its purpose. Right, because most people do not have the time, the resources, the inclination to study stocks, to manage their portfolios, to be active investors. And, anyhow, the research shows us that active investing isn't necessarily better, doesn't necessarily give you better returns, so why bother?

Speaker 2: 40:06

But the secret of people who make a lot of money is having high conviction in something. So I tend to take high conviction bets. I tend to say 80% of my portfolio is well diversified, follows the traditional rules of thumb of investing. That we've all been taught in our personal finance classes adheres to all of that, and 20% of it is on high conviction bets, because if you play roulette, you can either diversify your way to holding the same spot on the board the entire night, or you can place a high conviction bet and put it all on red and eventually win something and walk out of there with a lot of money. So I would say about 80% of my portfolio follows all the traditional rules of thumb 20% of the time. I'm not averse to a mean stock or a high conviction bet of some sort.

Speaker 1: 41:05

Yeah, if it turns out you're working with a roaring kitty, you might get into trouble. Uh, just just to be clear on no, no, no, uh.

Speaker 2: 41:13

But I think I think most people feel that way, intuitively right, and I think that's why it's so hard to tell people no, don't go all in on x stock or x investment, you know, don't put all your chips on red, because intuitively most people think you know, if I don't make a big bet with my money, when am I ever going to get rich? And you know, the sad answer is we're not all going to get rich If we follow the traditional rules of investing in personal finance. The goal is that we'll all end up comfortable and safe financially. But it is folly, I think, to tell people you should entirely ignore that instinct to take high conviction bets. So what I would say is if you're somebody who feels you're really well informed on a particular bet, on a particular investment, on a particular opportunity, you have the money, you can afford to take that bet. I would be remiss to tell you not to take it.

Speaker 1: 42:08

I would be remiss to tell you not to take it. In 2021, when the meme stocks were all the rage and everybody was playing with these you know what they call shit coins. On the crypto side, I had put out a post saying this is literally the funniest market I've ever seen, Because comedy became a way for investment ideas to go higher and to get allocations. As a journalist who's been in this for a while and recognizing that this is a very serious domain, are we in this era of comedy is how you invest. I mean, it just seems like this is not going to go away. This sort of meme dynamic is never going to end this sort of moon in the short term, and silliness.

Speaker 1: 42:56

It bothers me as somebody who looks at this stuff from a much more serious perspective. But how do you think about it?

Speaker 2: 43:02

I don't think so, michael. I think this is today's tulip mania. It was the tulip mania of the 1600s 1700s in the Netherlands. I think there have always been wacky or colorful investment opportunities like this People capitalize on. I think, whether you want to call it a Ponzi scheme or just a very risky trade, these things have always been around. I think what it does indicate, though, is that we are been around. I think what it does indicate, though, is that we are. You know, we're late cycle people.

Speaker 2: 43:32

People want to take risky bets. People still have a lot of money. There's still a lot of liquidity. You know, you have this big asset inflation. People have money to spend, they have jobs, they have savings, they made money in the market, they made money on their houses, they have money to bet with right, and that's what it's signifying to me.

Speaker 2: 43:49

When people stop making these risky bets, it's because they don't have money, it's because they need to pull back, it's because the risk environment is indicating that the market's really unhealthy, that the opportunities aren't there, that there isn't enough liquidity. This, to me, indicates that there's still a lot of liquidity sloshing around that doesn't know what to do with itself. Part of it is a function of higher interest rates. Higher interest rates have raised the cost of capital, have created some dislocations in the allocation of capital that make some sort of bets, some types of bets, less palatable now, and so people are turning to sort of these riskier bets as a way to allocate that excess liquidity. So to me it's just a tale of excess liquidity. That's no different from any other time in history when there was a lot of money sloshing around and people started investing in silly or unusual or niche things to get big returns yeah, I just gotta imagine it.

Speaker 1: 44:51

It's gotta bother you and others that are interviewing, uh, very serious senior individuals who, to your point, are very intelligent, and you're asking them what do you think about roaring kitty, like you're not even referencing. You're referencing like his uh, it, it.

Speaker 2: 45:11

We live in transformational times and people always say that that we live like this crazy junction in history and they're transformational times. But they really are. But, roaring Kitty, I mean you know the, the, the the whale has always been around, you know, and people really haven't known who the whale is, right, and that's been around for years, and whether it was like in the LIBOR rate setting schemes or oil scheme. You know, there have always been big whales that move markets and people haven't necessarily known who they've been and they've been accused of market manipulation and that has been around since time immemorial. If anything and, frank, I have no money invested in any meme stock right now. I have no chip in this game. I have no interest in this whatsoever.

Speaker 2: 45:59

Frankly, I think, roaring Kitty, at least you know who the person is. He posts his position transparently, so you know where his money's going, where it's headed. Can he potentially be accused of? You know, cheerleading and creating a pump? Yeah, but a lot of other people can. So what I'm trying to argue is I'm not trying to like advocate on his behalf, but I am trying to say that this is nothing new. There have always been big whales that have been accused of market manipulation, accused of moving the markets, accused of not being fully transparent, and I think, if anything, this guy's a little bit more transparent than the big whales in the past. Right, this guy is doing what he's telling you he's going to do, so I'm not as offended by it as perhaps I should be.

Speaker 1: 46:46

Fair enough, janet, for those who want to track more your thoughts, more your work, where would you point them to and then maybe kind of wrap up with your biggest piece of advice for those that are coming out of college that again have the journalism degree? I'll give you a little bit of time to think through on that, but because I really do think it's, I believe we need to have journalists. I believe we have to have a human element in anything news related. I believe we need to have journalists. I believe we have to have a human element in anything news related. I believe that you have to diversify the biases, which means you still need to have enough people in the industry to do that. But you know those two things, so where should people find you?

Speaker 2: 47:20

on advice, so, yeah, if you want to follow me, I'm at Janet on the money on on twitter or x, or as we call it, twixtor, the amalgamation of twitter and x. Uh, my show is called the business briefing. It's on monday through fridays at 9 eastern 6, pacific, on sirius xm business channel 132, and michael's a regular on our show. We also have, you know, us governors, us trade secretaries, fortune 500 CEOs, the major economists of every big bank on the planet, so it's a really informational news hour. If you care about the markets, if you care about the economy, we have the best and the brightest on there, like Michael. So check out the show on Sirius XM Business Channel 132 every day, monday through Friday, or there on Twixter X at biz briefing.

Speaker 2: 48:14

The piece of advice I would give to new journalists and I would say, I would just point this out that a large percentage of people go into journalism do not have journalism degrees. I was not a journalist, I was an economics major and so I went into business journalism because that was my background is to have some hard skills associated with the type of reporting you intend on doing. So, if you're going to be a science journalist, to have studied science, to have worked in the science space, if you're going to be a business journalist, to have worked in finance, to have studied finance or economics, et cetera, because you want some of the hard skills, the analytical skills necessary to be able to report and comment effectively on the news. To be able to report and comment effectively on the news. The second piece of advice that I would give to anybody who wants to be a new journalist is to develop AI skills, develop the technical skills, the technical know-how. For the past 30 years, journalists have been asked to develop more and more and more skills and you know, no longer are you just a writer, no longer are you just somebody who has to interview effectively or appear on air effectively. You're somebody who has to be able to shoot, edit, manage a storyboard, manage increasingly a game of technology, of data, of data analysis. The best journalists are the people who can analyze the traffic on their own stories, the traffic on their own reporting, make good inferences from it, decide what was worthwhile and what wasn't, based on the data. Just as the data is inherent to good reporting, it's inherent to good news management and it's inherent to providing people with the news they want.

Speaker 2: 49:50

Second, I think a lot of journalists over the past several years got very dispirited. I was on a train ride once between New York and DC and this was five years ago and a guy sitting next to me. When he found out what I did for a living, he was, like you know, calling me basically an enemy of the state. And just basically a plea to society to remember that journalists are human beings, you know, and we're here to do the best we can to report on information when it's hard news, to do it without a bias, to the extent possible, because we are human beings, and, where opinion is called for, to try to provide you with different perspectives. And just finally, a call for everyone to remember that we're all part of the news media.

Speaker 2: 50:40

Now, when you wake up in the morning, you may not be a journalist, but when you wake up in the morning and you retweet something on Twitter or you share it on Facebook or you post it wherever, maybe on LinkedIn, you have essentially become part of that method of news propagation that 20 or 30 years ago, would have been solely the domain of the news industry itself. 20 or 30 years ago, it was only the news industry that was able to share out what it was producing. Now it's you, the news industry that was able to share out what it was producing, now it's you. So you, as much as we are in the news media, you are also part of the news apparatus now. So think critically about what you share, why you share it when you share it. When you do share, add your thoughts, add your critical thinking.

Speaker 2: 51:22

You don't know how much I enjoy reading threads on X and getting all of the critical opinions and all the critical thinking from users, from viewers, on the news that's being reported. It's valuable. It helps you, as a journalist, ask better questions too. It helps you reflect on what audiences want, and so good journalists pay attention to what their audiences are saying, because not only does it give you an insight into what types of news your audience wants reported on, but what types of questions they have, what do they need answered, what do they not understand fully and want more reporting on what you know, what interests them, what intrigues them. So I would just, as a call to action, remind everyone that we're all part of this global news apparatus now kind of, whether we intended or not, all part of this global news apparatus, now kind of whether we intended or not, and it's going to, you know, as AI grows stronger. It's that human element of inquiry, that human element of dissatisfaction, that human element of curiosity, the instinct to debate, that keeps it alive and well.

Speaker 2: 52:27

Five to 10 years ago, when message boards online were all the rage, maybe 10 years ago, a lot of the major news outlets, right and left, decided to shut down the message boards because they found them too polemic.

Speaker 2: 52:43

They found the conversation too heated. While I think that there is space for moderation where the conversation really gets out of line and is truly inappropriate, I think that there is something lost when the public domain doesn't engage directly with the news media. Right, in years past it used to be letters to the editor, now it's leaving snarky comments underneath the story. That's valuable. I think that is the spirit, the democratic spirit of free speech. I think that is at the heart of what creates a good news media, and I think that AI may create a space where there's less opportunity for that in the future. And so what I would caution against is a future in which our opinions, our that human spirit, that inquiry, that passion, those ideas, that debate, that conversation flowing, the journalists who write the stories, who produce the news care about it, but it's also what makes news real, what makes news valuable and why news matters. News matters because of the opinions you and I form on the events around us.

Speaker 1: 54:08

Everybody. Please make sure you follow Janet Alvarez. Great conversation. Hopefully I'll see you all in the next episode of Lead Lag Live. Thank you, janet, appreciate it.

Speaker 2: 54:16

Thank you, Michael.

Speaker 1: 54:17

Cheers everybody.