Sorry, Erin Burnett. OK.OK maybe it doesn't suck all together but if you take a mid to long term investing approach in stocks most of the day to day headline news is worthless. Or is it? Does news and analyst expectations move stocks more than the operating results themselves? I believe company performance or the cash and earnings it generates over time will ultimately determine the success of a company and its stock. During that time expectations of the company will change quarter to quarter and the stock will move accordingly. The big picture doesn't change, however, when a company misses "estimates" by a penny. It's interesting how it works though. It's hard to believe that a solid concept of valuation in stocks is actually new this century. John Burr Williams made it popular and Ben Graham took the smelly mess of investing that was practiced in the 1920s and revolutionized it in my opinion.

Capital Markets are not efficient, they give the illusion of efficiency in their function. When the majority of the financial industry is fixated on short-term expectations it allows you to exploit the system and take advantage of fear and uncertainty. I think Graham says this the best in The Intelligent Investor, "price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies." Basically, long term investors have an advantage in that they can exploit short-term swings.

I was watching Bloomberg, on TV and one of the anchors commented that some analysts thought Berkshire Hathaway (BRK-A) shares have been falling because Buffett has a lot of cash and interest rates are thought to fall lower. Huh? I was thinking to myself it was more likely Berkshire's stock is falling because it had a nice run, got fully valued and hasn't done to well recently with Moody's MCO and Washington Post WPO. It seems no matter what the rate of interest cash is getting, when it is in the palms of the greatest capital allocator on the planet, good things will come!

Don't listen to the news if you are striving to be a long term investor. Exploit the fear and emotion.

full disclosure: no position in any stocks mentioned