JK: One of the main concepts you discuss frequently is “News vs. Noise”.  What is the difference between the two?

Bartiromo:  News is important information that may influence your investments. Noise is talk or buzz or some headline that prevents you from seeing a story clearly.  News is useful.  Noise is a distraction.  Calling what’s noise and news after the fact is easy.  The hard part is sifting through the information when it’s in front of you and committing to a few sources, that is, gearing up your energy in one place and not wasting your energy in another.  Deciding which sources to invest your energy in and explaining how best to use them is what this book is all about.

JK: Do you think people trade too frequently?  If so, is it a product of too much noise?

Bartiromo:  Yes and yes.  We have become a society that trades frequently. Investors often act on every tick in the market without good reason. And that has a major downside, which is another reason for this book. Maybe we don’t need to know every upgrade and downgrade of a stock.  Although I think the value of venues like CNBC is that they give investors an opportunity to reevaluate the situation minute by minute, maybe we don’t need to follow the market so closely. I think the information explosion has created noise to the extent that people get trigger-happy, which can be detrimental.
     One of the most important questions I throw out in the book is:  Has the story  of your stock changed?  Has the reason you bought this stock in the first place gone away?  Having the opportunity to follow the market frequently gives you the opportunity to see if you need to reevaluate your portfolio.  But reevaluating your portfolio shouldn’t trigger a sell signal so frequently.  That’s why it’s important to keep things in perspective, so that you avoid a knee-jerk reaction or a rash decision. 

JK: Just how much impact does the individual investor have on the market?  Do they possess anywhere near the clout of the institutional investor?

Bartiromo:  Individual investors have become far more powerful than anyone gives them credit for.  Today, 85 million Americans invest in stocks.  Collectively, that kind of buying and selling power can move markets. Having said that, the institutional investor remains the bigger influence on individual trades simply because the institutional investor has more money to support the order and that will have more of an impact on the stock.  The average trade of an individual is in the thousands of shares, whereas the institutional trade can be in the millions of shares.  Clearly, the bigger the order, the bigger the move in the stock. 

JK: How should the investment strategy of a recent college graduate differ from someone, say, who is five years away from retirement?

Bartiromo: I’m not a money manager, but I can tell you what the conventional wisdom is. The younger you are, the more risk you can take on. If you’re just out of college, you can have a lot more exposure to stocks than what most financial planners recommend to someone close to retirement, the simple reason being you have a much longer-term horizon until when you need that money. 

Using the Internet to Invest, Wall Street's Conflict of Interest, the Shortcomings of Professional Money Managers & Energy Prices and the Economy

JK: An important part of any investment strategy is research - you mentioned that you use the Internet as a tool – how so, and what are a few of your favorite research sites?  Besides your husband’s Individualinvestor.com ;-)

Bartiromo:  I’m frequently on the Internet, digging up information about companies and checking the activities of particular stocks and industry sectors.  The amount of data and analysis available for free is a true example of how the information explosion has leveled the playing field for individual investors.  That said, one of my favorite sites is, as yet, not free.  Bridge Information Systems (www.bridge.com) gives me access to real-time exchange data, including equities and commodities; fundamental stock data, including tabular information and earnings estimates; technical charting for all stocks; and incredible amount of news, ranging from daily market reviews for G7 countries to press releases for individual companies.  You can, however, replicate many of their services for nothing.  It's a combination of the more than 30 research sites I mention in the book’s appendix.  

JK: In recent Congressional hearings, Wall Street analysts have essentially been accused of failing to warn investors to sell their equities in order to attract the lucrative investment banking business of large corporations.  Is this a widespread problem?  What is the solution?

Bartiromo: There is a fundamental conflict of interest on the part of analysts who recommend stocks of the companies that their firms do business with.  Until we have a change in the way Wall Street works, this will continue to be an issue. From an investor’s standpoint, the best you can do is be aware of it.

As a reporter, I approach every situation knowing that everyone has his or her own agenda.  It’s not a bad thing; it’s just a fact. Investors need to recognize that not every analyst is dishonest but there are potential conflict-of-interest issues to be aware of.  Rather than basing your investment decisions entirely on an analyst’s recommendation, you should take analysts’ recommendations as just one piece of the puzzle.  It’s also worth taking note of the research from analysts’ firms that do not do investment banking.  In the book, we discuss several of those firms, including Wit Soundview, Sanford Bernstein and others. 

JK: Why is it that professional money managers constantly under-perform the Dow Jones Industrial Average or the S&P 500, which is essentially unmanaged?  Isn’t this one of the biggest arguments against the “smart” money?

Bartiromo:  Yes, it is.  One of the reasons is that money managers are gauged on a quarterly basis, so every three months their record is compared to the S&P Index. And, frankly, until the last couple of years, the market has been on a bull run and the major indexes have taken off, so individual money managers who did not mimic the S&P and the Dow have fallen short.  But that’s why an individual can have a leg up on a professional, because the professional is trying to gauge himself against the S&P 500 every quarter whereas the individual has the freedom to take the long view.

The Personal Maria: Her Career & Influences 

JK: If you could be doing anything else, what would it be and why?  I believe you interviewed for the spot opposite Regis in his morning talk show.  Would you eventually like to go that route?

Bartiromo:  When I was in school, the gamut of careers that I thought I would do included being a nurse, an interior decorator, and a pharmacist.  When I was younger, I also wanted to be a back-up singer. The truth is, when I finally stumbled on broadcast journalism in business news, I realized I had found my true love and so, I must admit, I’m having the time of my life. 

JK: Do you mind the “Money Honey” label?

Bartiromo:  Initially, I did feel that it took away from my credentials.  But the truth is, I don’t mind at all.  In fact, I’m flattered just to have gotten recognized.  Also, I must admit, no one calls me that except the tabloid newspapers, and if that’s the way you’d like to refer to me, I’m happy to have gotten noticed.  I don’t take myself or that name too seriously. 

JK: Rumor is, you are into fashion.  Who’s your favorite designer?

Bartiromo:    I love Armani and Gucci.  My style usually consists of clothes with simple and clean lines, accessorized with a pearl necklace. 

JK: Do you get tired of the “What’s Warren Buffett doing?” questions?

Bartiromo:  Not really. He has been a wonderful investor and he’s one of those people that the world likes to emulate.  I wish him the best. 

JK: You mention in the book that you only own several mutual funds that you purchased over ten years ago, before you began your current job.  Have they performed well :-)

Bartiromo:  They have performed in step with the market. 

JK: If you were an average investor, sitting at home, what would your investment strategy be?  Momentum?  Value?

Bartiromo:  I would mix it up between value and growth.  I would look for companies that generate above-average revenue and earnings, and I would make sure that I understand the business, especially the product that is driving growth.  Lastly,  I would take the long-term view, and when I say long-term, I mean anywhere from three to five to ten years and beyond.  In other words, don’t be scared out of the market over a short-term blip.

JK: What do you think are the one or two essentials that every new investor needs to know?

Bartiromo:  The nuts and bolts of a company’s fundamentals are earnings and revenues.  Revenues are how a company makes money and earnings are what’s left after it spends it.  You can’t get more fundamental than that.  Learn to read a company’s financial statements—I explain the news and noise of balance sheets, cash flow statements and income statement—and you’ll know have a good picture of where the company’s money is coming from, where it is going and, most important, how much money the company owes.

JK: Who is the one person that has made the biggest impact on your professional life?

Bartiromo:  A couple of people.  My husband is very smart about business information, so he’s always a wonderful sounding board for my ideas.  My two biggest mentors have been Jack Welch of General Electric and Dick Grasso of the New York Stock Exchange.  Both men have exhibited a strong, successful yet humble way about them. When a person becomes successful and yet never forgets who they are or where they come from to me is a great attribute, and I admire that greatly in an executive.  Probably the greatest influence on me has been my mother.  She and I are very close and I’ve watched her work very hard throughout my life and it has molded my character. 

JK: You seem to love your job… have you always known you would be involved in finance?

Bartiromo:  No, I fell into it.  I had studied economics and journalism at NYU and expected to do something business-related, but then I got an internship at CNN in the financial broadcasting division and realized that I loved it. It was there where I began narrowing my focus to the markets and began putting together a great network of sources that I began calling on regularly. 

JK: Did people take you seriously when you first started out?  I’m interested in how you worked your way up through CNN.  You were actually upset initially that you were interning there, correct?

Bartiromo:  I was upset because CNN wasn’t one of the major networks at the time.  Remember, this was before the Gulf War, which really put CNN on the map, and it was a time when cable television was still very small.  I was completely wrong in that assessment, because CNN gave me an opportunity to do so much and learn so much. 

When I first started out at the New York Stock Exchange, there were plenty of people who didn’t take me seriously.  The mentality of being in a boys’ club where the information should only be shared among members and not with the individual was very strong.  In a situation like that, I can only recommend making sure that you do your homework, you know your stuff—that’s most important—and that you stand firm and be determined, as I try to be.  Being a woman on Wall Street has had its challenges in that regard. 

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