This summer I joined the cool crowd and purchased an iPhone. (My daughter Georgia says this doesn’t automatically gain me admittance to the cool crowd, but I guess it’s a start. It’s got to be cooler than my old bag phone.)

Anyway, the iPhone came with an app (FYI, this is what cool people say when they mean “application,” becoz we R busy and don’t have time for 4 syllables) that tracks the performance of the major stock indices. At the bottom of the screen are links to a variety of news stories related to the market and finance, and after a few weeks I began to notice a curious thing about the headlines I was seeing.

Most of the stories were links to generic, market-related articles from well-regarded news sources such as Reuters, Associated Press, etc.  But sandwiched in between, I kept seeing headlines scroll by that were both dire and sensationalistic:

Are We On The Verge of Another Black Monday?

Welcome to History’s Biggest Sucker Rally

Why the Dow Won’t Close Over 10,000

(Ha-ha on that last one, BTW.)

These links always went to obscure web sites that I didn’t recognize. Initially I assumed they were just opinion pieces written by news sites I wasn’t familiar with, and I didn’t pay any attention to them. But one day curiosity got the better of me and I followed the link to the story about how the market was about to take a 90% swan dive. And as soon as I started reading I felt like “History’s Biggest Sucker” myself, because three paragraphs into this “article” about how Armageddon was upon us there was the pitch:

“At my XYZ Fund Timing Newsletter we correctly called the 2008 market crash. Subscribe for just $149 a year and learn how to protect yourself from the even bigger crash to come!”

It wasn’t an article at all – it was an infomercial for a market-timing newsletter. It never ceases to amaze me that people fork over good money for these things, because of the gaping hole in the logic: If the guy knows what the market is going to do and knows how to profit from it, he should be able to make a couple billion dollars just by flipping stocks, right? So why does he need your measly $149?

I assume these are paid-placement links in the stock-market app, but I really don’t know. Maybe the people who compile the links are just gullible enough to think these web sites are legitimate news sources instead of charlatans in journalists clothing. Whatever the case, it was sandwiched right in there with all the legitimate market news of the day from the mainline media.

That is the problem for investors today: In the cyberworld the lines between real media and faux media are fuzzier than a Congressman’s expense report. At traditional media outlets you have editors who double as gatekeepers, but there are no editors on the Internet – only compilers, aggregators and advertisers.

Investors have never had access to more information than they do today, and they have never been more on their own to sleuth out the real news from the faux news. And that is a very precarious situation, because one of the great ironies of successful investing is that too much information is often a bad thing, because investors become overwhelmed and can’t sort out fact from fiction. Real articles from fake advertorials. So they fall victim to the one guy who claims he absolutely knows what to do and where to be. Alas, that is the absolute last guy you want to listen to.

And that’s the way it is in today’s world of mixed media. We miss you, Walter Cronkite.