Why (Most) People Hate Good Financial News

I wasn’t planning to write anything today, but I see a lot of negative commentary about a pretty positive employment report.  And it got me thinking about how people seem to hate good financial news.  Now, of course there are the permabulls, who seem to always think everything is great (usually because their business requires them to be biased), but I see a lot more people who just generally despise good financial news.

I don’t have the best answer in the world for this phenomenon, but I think I have a decent one.  The short answer is, people hate feeling like they’re falling behind.  You see, when everything around you is getting better and you don’t directly benefit from it you feel like the world is closing in on you.  The “Joneses” are closing the gap on you.  Or you feel like you’re not keeping up.  As a species, we’re obsessed with making progress.  And when we see signs that those around us are making progress it makes us feel like we’re falling behind.

The same sort of thinking applies to stock prices.  Whenever someone sells a stock that goes up there is an opportunity cost involved that someone else is potentially benefiting from.  You feel like you’re falling behind.    That’s why we see a lot of negativity from certain people when stock prices rise.  Odds are, they’re not involved.   But this sort of thinking can be really destructive (especially in the market). It’s what leads people to believe they need to chase the market, make irrational decisions, take more risk, “double down”, etc.

But hey, it’s not as bad as you think.  Odds are this thinking is the result of your built-in need to make progress.  It’s only damaging if you let it defeat you (as in, you stop progressing) or worse, you make silly decisions chasing the people who appear to be surging to the top.  Feeling the pressure to “keep up with the Joneses” isn’t necessarily a bad thing.  But it shouldn’t guide how you go about your business and your life.


Got a comment or question about this post? Feel free to use the Ask Cullen section, leave a comment in the forum or send me a message on Twitter.

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Steve W

    Good points about human nature. There’s certainly some reasons to focus on the positives in the employment report, but what emphasis should we place on the labor force participation rate?

  • Dan

    From your commentary it must mean your in the top 10%?

    Because brother, there are a lot of people falling off the truck and until you feel your face hitting the pavement you don’t know what its like.

  • Tonka

    I think we’re going through something similar to what happened after 1987. After the crash everyone needed new strategies and new ways of measuring risk. When confronted with a new strategy only one question mattered: “Did it call the crash?”

    This is of incredible importance to most people because there are two ways to get ahead. First of all you can outpace your rivals. Secondly, your rivals can fail. Surviving a massive financial crash when others fail not only puts you ahead, it gives you a hell of a lot to brag about. A lot more to brag about than just keeping up when everyone is making money in a bull market.

    All those people that got burned the last time really want a second chance. A chance for the market to crash and for their opinions to be correct in a way that puts them ahead of others. Meanwhile, buy and hold is as strong as ever.

  • Tonka

    Focusing on labor force participation and fretting about how job creation isn’t keeping up with inflation would have kept you heavily under invested over the last four years. There are articles on this subject every month. What else can you say other than there’s always a good reason to be entirely in cash.

    If unemployment keeps dropping, labor force participation will start to pick up.

  • frederick

    I don’t think Cullen is saying the world is great and there are no problems.

  • Johnny Evers

    People hate lies.
    Like when you tell them the job market is booming because they just got hired back as a part-timer without health insurance.
    Or when you tell them the economy is going great because the market is booming only they don’t have a 401k anymore.
    Or you give them the routine about what a great country this is (which they believe, too) only their kids are really struggling to get started.
    But you’re right about one thing — the 80 percent definitely hate they’re falling behind the 20 percent, especially when they have to hear you crow about it.

  • http://pragcap Michael Schofield

    If labor force participation was the same as 5 years ago UE would be over 11%. As economy improves, people may re-enter, making the official UE number stubbornly high. QE ’til late ’14? Could be.

  • http://pragcap Michael Schofield

    Hey, if the SPY stays here we’ll be at a record closing high. Get out yer party hats, the drinks are on Johnny Evers.

  • Johnny Evers

    From CBS Moneywatch:
    The median annual household income in January 2013 of $51,584 was 4.5 percent lower than the median of $54,008 in June 2009, which is when the recovery began. As if that were not enough, household income now is 6.2 percent lower than it was on the eve of the recession (December 2007), and is 7.3 percent lower than the median of $55,659 in January 2000.

  • Steve W

    Who said the job market is booming? Who said the economyis going great? Certainly not Cullen, and he’s not crowing about being in the 20 percent. Your mention of health insurance points to the absurdity of our health insurance system, and the ACPPA (Obamacare) will prove to be a bigger, more costly mess than advertised. The idea that employers should provide health insurance needs to be thrown away completely. We should move towards a system like Switzerland: mandatory health insurance with basic coverage (no one denied coverage due to medical history) priced with no profit to the insurance carrier; optional benefits actuarily priced with profit allowed; subsidies provided for low income citizens (for the basic plan).

    This is still a great country. Cycles happen, things can’t always be great. Help a neighbor. It will cheer you up.

  • http://www.orcamgroup.com Cullen Roche

    No, you’re right. Everything sucks and we should all just give up. That’s better advice.

    By the way, no one is crowing. I’m just tired of people like you who continually write about how everything is horrible or a conspiracy to get the little guy. How long do you get to be wrong before you get tired of being wrong? I’m not saying everything is great, but let’s be balanced….

  • Steve W

    But hey, you can buy a 42″ LCD TV today for almost 50% less than in 2009. :)

  • http://pragcap Michael Schofield

    The money didn’t go away, it just went up the ladder! And left most up the creek. If I was in charge things would be different, the bottom 80% deserves better, and it’s not just about fairness but also balance. I hope things continue to improve. I’m betting my money on it, you know.

  • SS

    Why do you let this guys infest the comments here? He would disagree with you if you said the sky was blue. I know your tolerance for trolls is high, but someone needs to speak up about this guy.

  • http://www.orcamgroup.com Cullen Roche

    And you know, I really don’t appreciate being personally attacked like this accusatory “crowing” comment. I used to run a business that ONLY dealt with high net worth investors. I rearranged my whole business so I could service smaller retail clients. I do a lot of work with investors who have modest portfolios. And it’s enormously rewarding, which is why I do it. I also provide a huge amount of educational material here and at the Orcam website so people can take more control of their finances and not feel the need to outsource it to a guy like me or other fund managers. My business is largely designed around helping small investors. So let’s not go around attacking me as though I am some “vampire squid” or “1%er” standing over everyone mocking the world. I don’t think that’s very fair.

  • rufusmcbufus

    I’ve decided rather than “keep up with the Jones’s” I will just punch them square in the mouth the next time they try to push their envy culture on me. How’s that for progress?

    PS Better watch out Jones’s. Rufus is coming for you.

  • Indignado

    Cullen, I don´t think that people hate genuinely good financial news. I would actually take the exact opposite view of your argument. Being a small business owner and having a very small degree of success I am incredibly focused on protecting any savings I can manage to put away for my family.

    As you pointed out, we have a number CBs that to some degree are moving the goal posts and attempting to force savers into riskier assets in the name of stabilizing the economy. This is a very frustrating situation for an entrepreneur who takes risk everyday when there is no transparency in terms of what is a safe place to put their savings.

    I can´t help to see the irony of a small business owner who takes risks and is punished for trying to protect the small returns through conservative investments. Aren´t we in a way turning capitalism on its head??? Risk implies risk, right.. at least it used to..

  • http://www.orcamgroup.com Cullen Roche

    Well, that’s part of what frustrates me about what the Fed is doing. At Orcam, I try to teach people that “investing” on a secondary market is actually allocating savings. And that implies a much more prudent approach than merely chasing the highest returns. I think the entire idea of “investing” in a secondary market is wrong. You don’t invest in a secondary market. You shouldn’t chase returns on a secondary market. You should allocate your savings prudently so that you can protect it from purchasing power loss and the risk of permanent loss in accordance with positive risk adjusted returns. But the Fed has flipped this on its head and told us that we shouldn’t be prudent and that we should just chase returns. It’s very misguided in my opinion and rather reckless. 20 years of boom/bust should have taught us this already.

  • Indignado

    And what does that say about the TV makers margins? I guess that probably also helps explain the lower wages pointed out above, right? Lower margins tighter labor costs..

  • http://www.deltafinancials.com Delta Financials

    I think the majority of folks are positioned “light” – so up moves and good news accentuate the feeling of getting left behind. And hey – for the average guy out there that’s pretty understandable. If you had some wall street not job harassing you to buy stocks in 2007 and then you did; and by March 2009 when they were down 50% not long after – and you hear testimonies where politicians scoring brownie points try to convey just how “rigged” this game is – I think the average bloke should be expected to be permanently skeptical.

    What’s interesting though is that we’re now getting a serious purge of negativity. Today was the first day when my twitter trendline was filled with the bears giving up, the bulls taking charge.. we haven’t hit mass Euphoria sort of sentiment – but hey, I don’t see the excessive negativity at the moment. I see a lot of smiling faces and a few disgruntled bears throwing in the towel. So, the interesting question to me is how reality has this fascinating way of going against popular sentiment.

  • Indignado

    Thanks for the response Cullen. I will check the Orcam site. I could not agree with you more on the Feds misguided policies. Possibly people´s anger isn´t at good financial news, but the anger is directed at an imprudent fed that has completely changed the rules of the game. When the financial news is good but you don´t know if it is sustainable or a side affect of ZIRP, this situation becomes very frustrating. May be that is where the anger is coming from.

  • hangemhi

    Crush the unions, keep min wage low, kill gov jobs, bail out the big boys, and let them write their own regulation. We got EXACTLY what the GOP has been trying to accomplish for 30 years….. low wages because that helps business. Yeah for businesses. Yeah top 1%.

  • http://www.orcamgroup.com Cullen Roche

    People often just look at the inflation rate and say “we are worse off”. You have to adjust inflation by per capita wages. This is a pretty good indication of living standards.

    As you can see, our productivity buys us a lot more today than it did in 1990, 1980 or 1970 (contrary to popular opinion). We are much better off than we were back then despite all this clamoring about “falling wages”. Those “falling wages” buy a lot more goods and services today than they did back when whether it’s a car, house, phone, TV, oven, or whatever. Innovation is a beautiful thing if you can understand how it improves our living standards. Even when inflation adjusted….

  • Richard

    Great post. I think you are absolutely correct. The other interesting point, at least to me, is that most of these doomsdayers are the ones promoting austerity. What do they think will happen to the job market if strong european style austerity is introduced?

  • hangemhi

    I used to see Johnny as a troll too but see a marked difference in his commentary in recent weeks/months. And the “crow” comment sounds like some of my accidental insults of Cullen where I was addressing “people” or a general theme I was hearing all over the place, and my comment sounded like I was attacking Cullen. So there you go JE – not that you needed me to stick up for you – but I get what you’re saying. Things are improving…. but lets not forget there are a lot of people being left behind, and many serious structural issues still not addressed. Which I know Cullen knows too.

    That will be 5 cents Charlie Brown.

  • Geoff

    I appreciate that Johnny is respectful.

  • CuriousLurker

    Cullen, we are very aware that you are not a vampire squid. There can only be one vampire squid and it lives on the other coast. :-)

    Thank you for your teachings, even if the lesson is sometimes unpleasant to hear.

  • Boston Larry

    Cullen, you said this kind of dangerous thinking “leads people to believe they need to chase the market.” But it is not always a bad thing to “chase” the market if you do it early in a market move. For example, if one decided to chase the strong up market on 12/31 and Jan 2nd, and if you jumped in on Jan 3rd, then being a momentum follower would have been a good move for the two months that followed. Folks who are underweight equities need to decide whether this rally “has legs” or not. If the string of positive economic news continues, who knows we could be headed up to S&P of 1650 or more in a year’s time. I think you are being more critical of the people who have stayed out of stocks entirely and now that it’s at a record high, are throwing in all they have. That is totally different than dollar-cost averaging slowly into what appears to be a fundamentally sound bull market. Cullen, what are your thoughts on this?

  • R


    I appreciate your insights but I don’t think that services have seen the productivity cost savings that goods have. Utilities,Medical insurance and school tuition have risen considerately higher than general inflation.

  • Tom Brown

    I used a similar technique on the downward slide of the .com bubble in the early 00’s. By pure luck I missed the 1st half of the market slide because I left an employee owned company, and they forced me to sell all my stock when I left… so I left it in cash out of pure laziness… watching the market go down and down. Eventually I felt like I was too lazy and should snap out of it, so I SLOWLY re-invested in equities over a multi-month time frame, hoping to take advantage of dollar cost averaging, like you say. Unfortunately those months corresponded to the 2nd half of the slide in equity prices :( … maybe I just was too quick to get back in! If I’d spread that out to a couple of years I’d have done better.

  • Tom Brown

    Cullen, I’m still largely in my “capital preservation” fund (or whatever its called). Watching the market go by… earning my 2 to 2.5% a year. I don’t feel bad at all actually. I suppose if things REALLY took off I might feel some of what you’re talking about. I know I really should “dollar cost average” my way back in, like Boston Larry talks about, but I’m really in no rush.

    Having watched my savings get cut in half in 2008/2009 was more traumatizing that I imagined I guess. I stuck w/ the program then (John Bogle would have been proud), and didn’t sell until mid-2011… when I just couldn’t bear to watch the slow train wreck in Washington that we call a government play w/ our lives and fortunes anymore. I feel nice and secure imagining that my fund will likely preserve it’s $1 a share value… and basically keep up w/ inflation. I’m not eager to white knuckle it again anytime soon…. but I’m sure I will eventually… I’m just enjoying keeping out of the game a little while longer.

  • Tom Brown


  • Johnny Evers

    ‘Crow’ was an inflammatory word and I apologize for that.
    I get emotional about this, I admit. This morning I helped a 50-year-old man who was laid off at his union bakery shop when the place changed ownership — the shop has since replaced him with a non-union, 35-hour a week hire. This guy doesn’t know it yet, but he is probably never going to get another job like that. I see that a lot. Maybe it’s a condition of where I’m at. Maybe the bigger picture is better.
    I love this site.
    If I’m being a pain in the ass I can leave. But I enjoy the site.
    Cullen is a smart guy with some original ideas and has created a positive forum. I really respect he takes the time to interact with us. And he’s convinced me that banks create money and that I need to look at my own assets and my clients assets as savings and not investments.
    For me this is a place, imo, to talk about the economy, not the markets, and to ask questions and toss around ideas. I’ll try to stick to that and not cross the line.

  • http://www.orcamgroup.com Cullen Roche


    I would NEVER ask you to leave. All I ask from readers is that they not make things personal. That’s it. I want people to disagree. I don’t have all the answers. And I lean on readers for answers all the time. It’s great. But when it gets personal it gets counterproductive. So I try to cut that out before it happens. Thanks for understanding. Have a great weekend.


  • http://www.fanbrowser.com/ Cowpoke

    JE, good point, this place more about economies that mere markets.

  • http://www.fanbrowser.com/ Cowpoke

    Cullen, you may be able to help answer your own question here:

    “For the last 6 weeks I’ve been watching Apple’s stock move higher literally every single day. The crazy thing is that 6 weeks ago Apple’s stock had already gone parabolic and I said it was excessively risky to enter a position either short or long. And since then it’s rallied another 20%. I’ve seen charts like that a million times. And they never end well. ”

    See Cullen, back then were not so pom pom waving while many others were. AND as it turns out for very good reason. Man’O Man if you woulda took that Short position… :)

  • SS

    That’s a great catch. I forgot about how Cullen was warning people about Apple. I wish he did more trading calls. Back before he started Orcam he used to reveal some great calls here.

  • http://wellsfargomustdie.blogspot.com Wells Fargo Must Die

    Most people have not been bullish so the runup of the market upsets them because they have been wrong. Plus, a majority of investors have Republican views so seeing the market go up with Obama in charge is frustrating because it’s not supposed to happen.

    Then there is the fact that much of the runup is due to financial engineering which people know is largely manufactured by policies they are against.

    Not that much for too many people to feel good about except those that have been wildly bullish because they recognized the Fed was going to pump up the market. Those are the people that are supposed to lose.

  • http://www.fanbrowser.com/ Cowpoke

    For the middle class, expenses grow faster than paychecks


    “Why (Most) People Hate Good Financial News”

    Perhaps because REALITY trumps HEADLINES? I dunno.

  • IveSeenTheLight

    Cullen, since you rarely drill down beneath the surface of superficially misleading BLS, Federal Reserve, or other government or quasi-government agency economic reports, releases or other data, maybe it’s not that people are generally pessimistic, but rather that they’ve grown rightfully skeptical of highly massaged and manipulated statistics, along with a parrot-repeating Main Stream Media that also consistently fails to drill down beneath the “headline numbers & reports” and just intentionally or naively tows the governmental B.S.

    Maybe you’re naive for failing to peel back the layers of the misleading surface of many statistical reports, maybe what you call “pessimistic” is warranted skepticism and realism, and maybe you’re flat out full of it.

  • http://www.orcamgroup.com Cullen Roche

    I don’t think you’ve read my work close enough. I am highly critical of the CPI data which I think is suppressed by the way they calculate OER instead of calculating home prices for what they are. Maybe read my criticism of the CPI data a bit more closely.


  • LRM

    Thoughtfull post and some great comments.
    We get the good employment news and then Comstock gives us the big picture a couple of posts later and the seeds of doubt are again sowed into that fertile soil (the fearful uncertain mind of self)

  • Charles

    But the stock market is not about laborers, its about capital. Capital has seen a substantial increase of national GDP whereas labor has seen a substantial decrease as a % of GDP. Some of this is globalization, some of this is automation, but as long as the govt runs massive deficits to support the ability for laborers to spend you have a stock market utopia.

    Corp profits go up as corporations focus on lowering labor cost and rewarding investors/capital. Labor suffers income loss/stagnation but is supported by a federal government with an infinite ability (up to the point of inflation) to give transfer payment. We all win.

  • KB


    How did you determine that most of people do not like good economic news? If it is based on your comments, it would be biased, as, first, you have a specific audience, and, secondly, bearish people tend to comment more than bullish. A normal bullish optimist, if he is not in the business, would not bother to comment at all, as everyting is obviously very good to him….
    About the “good” economic news themselves: very unfortunately, the newswlow is more biased to show something good, rather than something bad. Again, it is inherent trait of a human being. Thus, a small minority that tries to be unbiased may be somewhat frustrated by the natural bias of the newsflow.

  • Steve W

    Good question. Personal computers as well as many other consumer electronics are goods that have seen price deflation for several years. In many cases the products are throw away commodities. Margin squeeze? I suspect that’s true, but costs have gone down for other reasons too, such as more efficient manufacturing processes. We’re talking mostly about products made in China, Korea, and Japan — right? I suppose we should be including some other Asian countries. China’s wages have been going up for years, they’re losing manufacturing jobs.

  • Reality

    Your response about the lower costs of particular items like computers and other gadgets mirrors the thinking of William “Let Them Eat iPads” Dudley of the New York Branch of the Federal Reserve Bank, who, when asked about the tripling (or more) in the cost of essentials like the cost of groceries, gasoline or heating oil (not to mention medical care and pharmaceuticals or tuition), that are needed to be purchased often – even daily- responded with “but the iPad 2 is more powerful and less expensive than the first iPad.”

    That would be great if the iPad2 could fill your gasoline tank, furnace, medicine cabinet and stomach.

  • thepigman

    We all like good financial news. But since the Fed has completely
    rigged the market with QE, it’s ALWAYS good financial news even
    when it isn’t. Anyone can look at the actual macro and see that the real economy is going just about nowhere. The jobs reported Friday were virtually all multiple part-time to get around Obamacare and will simply be revised away going forward. I could go on but why bother?
    What everyone loves is a completely rigged market.

  • Nils

    I’m in. Get some pitchforks and a third guy and we got a mob going.

  • Steve

    “The Joneses,” not “the Jones’s,” would be correct.

  • http://www.usgovernmentspending.com/spending_chart_2007_2013USb_13s1li011mcn_F0sF0l Marc Sargen

    There are two other reasons why people may not like “good” news

    First, they feel like they are being tricked or manipulated.
    If people don’t trust the teller then they feel like they are being manipulated which causes anger & upset.
    This can be a rational & logical situation. We have distrusted the “good” news coming from North Korea, Iran, or the Soviet Union. We have distrusted the sanitized news broadcasted from the US Government during Vietnam.
    It can also be irrational when people believe conspiracy theories.

    The second is that the news contradicts their view of the world & they get angry at any thing that disagrees with them. There are plenty of economist who become upset when the good news contradicts their theories & models, & plenty of doomsayers who become upset when they can’t tell the world, “I told you, so.”

  • http://oneconomist.com Hans

    I believe could have gone without this thread.

    Perhaps it should be left to Dr Phil or Dr Oz.