Big Tease - Newsweek1

The Big Tease Continues

Big Tease - Newsweek1

Take a walk past the financial section of your local newsstand, and you are likely to be greeted with headlines like “Ten Hot Stock Picks for 2014!” or “The Top Ten Mutual Funds to Buy Today!” or getting more directly to the point, “Make Money Today!”

At Index Fund Advisors, we refer to these types of shameless attention-grabbing magazine covers as investment pornography. The credit for this appellation goes to a long-time voice of reason among financial journalists, Jane Bryant Quinn, who wrote a column1 for Newsweek in 1995 titled “The Big Tease”, in which she explained how these types of stories “tickle our prurient financial interest” yet provide nothing of lasting value. After months of patiently waiting on eBay, we recently acquired an original copy of this Newsweek issue.


In a show of true journalistic courage, Quinn took Newsweek itself to task:

“Mainline magazines—including Newsweek’s monthly section “Focus: On Your Money”—rarely descend to hard-core porn. That’s what you get from the greedy gurus on cable TV or the cruising shysters of the Internet…We of the quality-media crowd specialize in soft-core porn, which means that we tease you without quite going all the way.”

Just as with standard pornography, the reasons for the existence of investment pornography are all too obvious. If Forbes, Fortune, Kiplinger’s, Money, and Smart Money magazines carried headlines such as “Buy Index Funds and Hold them for the Long Term”, they probably would not stay in business for long. Rather than attempting to beat them in their shouting game, Quinn strategically joined them when in the April 17, 1995 edition2, she titled a separate column "Indexing: “For Winners Only”. In that article she declared, "But the secret to wealth is that a secret doesn't exist." You can see it below:  Enlarge

While Quinn’s column long predated the sound and fury of CNBC’s Jim Cramer, it was contemporaneous with the much more genteel Louis Rukeyser’s Wall Street Week where a guest panel shared their stock picks with the sophisticated PBS viewing audience. Regarding the performance of these picks, Quinn cited a study by Norman Fosback who found that the recommended stocks tend to have risen in the two weeks before the show, then they spike up on the Monday after the show (when everybody buys), hover there for a week, and then drop back down. There is no doubt that if Quinn had written her column today, she would have devoted part of it to Cramer, and she could have cited this study which shows that Cramer’s picks have provided no value to the investing public.

Although Quinn’s column appears to be a general condemnation of the financial media, she was careful to point out the positive aspects of the magazines mentioned above. Many times, readers will find good advice in areas such as budgeting and financial planning . As Quinn explained, “Readers who keep buying the hot funds that are profiled each month are showing more fund envy than common sense…There are other things besides Smart Money to take to bed.”


1Quinn, Jane Bryant, “The Big Tease”, Newsweek, August 7,1995, pp. 64-65.

2Quinn, Jane Bryant, “Indexing: For Winners Only”, Newsweek, April 17, 1995, p. 62.