Bob’s New Book – And Why It Doesn’t Pay to Second Guess the Market
Ric Edelman: I'm really excited to bring on a very special guest to the program, my good friend Bob Pisani. You know him well. He's the senior markets correspondent for CNBC and he's just written a brand-new book, Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange. The book is out October 18th. You can buy it right now on Amazon. Bob, welcome to the program. Great to have you.
Bob Pisani: Ric, thanks so much. You've been a great inspiration for many years and a good friend. I'm really excited to be on the show with you.
Ric: Well, in case somehow you've been under a rock for the past 25 years, Bob has covered Wall Street and the stock market. Now for 25 years, Bob has met and interviewed virtually everybody. Robert Downey Jr. Walter Cronkite. Aretha Franklin. Barry Manilow. Joey Ramone, Alibaba Chairman Jack Ma, who, by the way, launched the biggest IPO in history. Bob's been on the front lines for every financial event of the past quarter century, from the Asian financial crisis of 97 to the Dotcom bubble, through 9/11, the credit crisis of '08 and of course, COVID. Bob's seen how the investment world has changed from brokers shouting on the floor of the NYSE to fully electronic trading. The battle between stock picking superstars and low-cost index funds, the emergence of behavioral finance and so much more. So, Bob, it's really my pleasure to have you here on the show. And the roles are finally reversed. I've chatted with you so often on the floor of the NYSE for you and CNBC, and now I get to have you on my turf.
Bob: You know, it's quite funny when the tides are turned. One day in 1999, Walter Cronkite came on the floor. And for those of you who don't know, Walter Cronkite was the voice of my generation. Growing up in the 1950s and 60s, he was the number one nightly news broadcaster. It was the last month of the millennium. And he came on the floor and I ran up to him. I was so excited to meet him. Walter Cronkite, my hero. I wanted to be a journalist because of you. And I'm just so happy to meet you. And he looked at me and he said, 'you know, I'll tell you something that's amazing to me, the rise of financial journalism'. And this is when CNBC was becoming very popular, the stock market was becoming very popular. And he said, 'I find that quite amazing because back in the 50s and 60s and 70s, the stock market wasn't a big story. Now it's a huge story and you've got a whole TV station devoted to it. What do you think is going on? Why is the public so interested?' And I'll tell you what I thought immediately I thought, Oh my God, Walter Cronkite is interviewing me. This is the coolest thing ever. My childhood idol is interviewing me. So here we are. I usually interview you, Ric, and now you're chatting with me.
Ric: And so I'm going to take full advantage of the opportunity. Bob, first of all, there have been over the last 25 years, 10,000 people who have rung the bell at the New York Stock Exchange. Give me some of those 10,000 people who have made a really strong impression on you.
Bob: What would you give - you people listening - what would you give to meet all your heroes? I have met most of my heroes because every day there's an opening and closing bell. This has been a tradition of the New York Stock Exchange going back to the 1860s. But beginning in the mid 1990s, the management here decided to turn it into a bit of a spectacle. They started inviting rock stars and queens and politicians. So, for example, Barry Manilow came down one day. I'm a rock guy. I collect 1960s rock posters and he had come off an interview that he'd done with us and I said, Hello, Barry. Bob Pisani. I just want to ask you something. Did you write the famous jingle, like a good neighbor, State Farm is just there? The State Farm jingle. He said, 'You know, I did. I was a jingle writer. I wrote it, sold it for $500, and I never regretted it became famous'. But that that's what I did. But the man really impressed me. And occasionally those kinds of things happened.
Ric: And, you know, this is why I love your book so much, because it's filled with these kinds of anecdotes and stories and reminiscing of the incredible people you've met over the past 25 years. Just a couple of weeks ago, I had the opportunity to ring the bell at the NYSE. And because I'm such a big fan of what you've written, that's why I gave you a testimonial for your book. And I love the title, Shut Up and Keep Talking. Talk about what that title means.
Bob: Well, I was talking to the publisher and he said, what do they say to you in your ear? Well, they can say all sorts of things, but the typical commands are to stop talking, which usually means they say wrap. So that means shut up. And the other thing they usually say is don't shut up or stretch, which means keep talking. So I said, if you really want to boil it down, most of the time the commands that you hear from the control room are either some variant of shut up and keep talking. And the publisher says, that's it, that's the title, Shut Up and Keep Talking.
Ric: Of course, you talk about what's going on in the market today, but you personally think getting in out of the market on a daily basis is a pretty foolish long-term investment strategy?
Bob: Yeah, the problem with market timing is you have to be right going in and you have to be right going out. Your odds greatly increase that you're going to be wrong. The other thing that's a real problem is way too much trading. It increases the chances you're going to make some kind of mistake. Everyone is bad at it, not just amateur stock pickers, but professional stock pickers. The Federal Reserve is bad at forecasting. Nobody should sit there and try to think that they're going to second guess the market. That's why after watching this for 30 years, I'm largely a long-term buy and hold, Jack Bogle kind of guy believing in the value of owning broad swaths of the markets, about diversification and understanding what your risk parameters are.
Ric: You know, you're supposed to buy low, sell high, but everybody does the exact opposite of that. They buy high and they sell low. Your book has several chapters explaining all this. And so I think folks will be somewhat surprised to hear the way you're describing this, Bob. I think most folks would assume that you are the guy with the pulse of Wall Street. You're literally on the floor of the New York Stock Exchange. You interview all of these money managers and portfolio asset analysts and all these hedge fund managers and endowment supervisors. I mean, you're really paying attention on what the market is doing right now. And yet you're saying, I'm not trying to beat the market. I'm not trying to guess what the market's going to do next. I'm using low-cost index funds, investing in them for the long-term. I think people will find that message refreshing, surprising and accessible. And this is another one of the reasons I encourage folks to read your new book Shut Up and Keep Talking, which comes out October 18th, and you can order now on Amazon. Talk about a day in the life of your work at CNBC. You know, you're a gatekeeper. You decide what we, the viewers, are going to get to see and hear. How do you decide what to cover every day?
Bob: It's a process of elimination. I wake up by 5:30AM. I look at the S&P futures, a sort of simple way to look at how the day is going to go. But I do things that a lot of people do. I scan certain news sources. The Wall Street Journal, The Post, The New York Times. I look at a few comments from traders. I'll make some phone calls. And you know, Ric, this is Wall Street. People talk their book all the time. Everyone's got an agenda. But there are people who you can talk to who, not just know what they're talking about, but give you an honest opinion. And that's worth a lot. I've talked to you for many years. You and I tend to look at the markets and life in general in very similar ways. And I look for people who can explain things to me in a way that I think makes sense. The most important thing is when you're on in the morning, people want a quick summary of what's going on. So people want to know what's the trend in the market. Where is it going? So you like the weatherman for the stock market? And what direction is the wind blowing? It's really the art of storytelling, Ric, and you're good at this, too. I always say your job is to show how all these facts are connected. Draw the lines. That's kind of a definition of what journalism is.
Ric: And so give us your final piece of advice to everybody listening. What is the advice you give to investors today?
Bob: I say, number one, I'm a capitalist. I believe in the United States as a democratic system. Because of that, I own mostly plain vanilla index funds, and I have a fairly high risk tolerance because I think I'm going to live fairly long. And to think longer, believe in medical technology, believe in technology in general, I've never had any reason to doubt that.
Ric: That's Bob Pisani, the senior markets correspondent for CNBC here on The Truth About Your Future and his brand-new book, Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange. You can order the book right now at Amazon, your favorite bookseller. Bob Pisani, thanks so much for joining me on the show and see you on the floor of the New York Stock Exchange before too long, my friend.
Bob Pisani: Hope to do it soon. Ric, always a pleasure. Thank you.
Ric Edelman: Bob and I actually spoke for a lot longer than you heard here on the radio. You can watch, listen or read the entire conversation. Just visit us at TheTruthAYF.com. You know, if you miss part of the show, you can hear and watch the videocast. You can also watch my full-length interviews with leaders in the world of digital assets, personal finance and technology. You'll find articles on everything from NFTs to Bitcoin backwardation. You can also watch my Master Classes, including the Truth about Crypto and Financial Planning in the Age of Longevity. It's all free and it's all available to you at TheTruthAYF.com.