The Dangers of Single Source Financial Journalism

By Steven Specht No comments

Dear Ben Winck,

I am writing in regards to your July 27 article regarding the SunTrust position on the Tech rally (Winck, 2020). While I understand your role as a journalist for Business Insider involves reporting on financial institutions, I am concerned about your single-source article. To assert the stability of the Nasdaq and Tech stocks based on the word of a single analyst from single financial institution is reckless.

Financial institutions have a vested interest in ensuring confidence in the market as their own portfolios will be affected. It is important to consider what assets are held by SunTrust Bank’s parent company Truist Financial Corporation before considering the merit of the arguments by a single analyst. (Kanell, 2019).  

Looking at the Truist’s 13F filing with the SEC from the first quarter of 2020, there are number of concerns. First, 12-percent of their holdings are tied up in the very tech stocks your article asserts are stable (Truist, 2020). Secondly, 42-percent of their holdings are tied up in the broader financial sector, which itself is heavily invested in the tech sector. Take for example their ownership of the State Street S&P 500 ETF which goes by the symbol SPY. (Yahoo Finance, 2020). The top seven holdings totaling more than twenty-one percent of SPY holdings are traded on the NASDAQ. With this bearing out over the entirety of Truist holdings tied up in the Financial sector, one can assume that approximately 21-percent of their financial portfolio is tech-centric and is revolving around the cyber security oil and gas. Adding that onto the 12-percent they hold in the tech sector, nearly one-third of their portfolio is tied up in tech stocks.

Additionally, in late 2019 and early 2020, there was a flood of articles asserting a looming tech bubble. Senior contributor for Forbes, Richard Suttmeier wrote of the inflating parabolic bubble forming. In the Nasdaq (Suttmeir, 2019). In Bloomberg, Peter Coy wrote of irrational exuberance among investors. (Coy, 2019). You yourself wrote of a market reaching record tech bubbles. (Winck, 2019).

Granted, COVID-19 has been good for Tech Stocks given the need to stay inside and access digital technology. For example, Nasdaq index funds holding Zoom Video Communications have done quite well given the move to virtual meeting space rising more than 300-percent since the early days of the outbreak (Google Finance, 2020). However, there is no indication that this temporary stay has changed the underlying fundamentals of the market that were present in December of 2019.

We’ve been here before.

Without going into length about the primary causes of the 2007-2009 financial crisis, suffice it to say that hubris in banking has not gone away and neither has the quest for deregulation and monopolization of risk. Take for example fund manager Bill Miller famously portrayed as Bruce Miller in the Big Short (Lim, 2016). In early March or 2008, he was eagerly buying up stocks of Countrywide, the largest mortgage lender (Levenson and Leshinsky, 2008) and asserted that he had no issue with liquidity a week later. (Lewis, 2010). The fund he managed was LMVTX (Levenson, 2008). At that point his fund had already lost 50-percent from its all time high and would go on to lost another 50-percent from that point along with the rest of the market between then and February 2009 (Google Finance, 2020).

I’m not saying you are wrong in writing about the stability of tech stocks. I’m saying you are wrong in writing with such certainty based on the words from one man at one bank with a vested interest in confidence. Do not enable the mistakes of the past.


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Google Finance. (2020). Zoom Video Communications Inc. Market Summary.

Kannell, M. E. (2019, December 9). SunTrust bank merger completed with BB&T, creating Truist. Atlanta Journal Constitution.


Levenson E. (2008, August 1). Bill Miller: Toughest market I’ve seen. Fortune.

Levenson E. and Lashinsky A. (2008, March 6). Bill Miller fights back.CNN.

Lewis, M. (2010). The big short : [Inside the doomsday machine] Simon and Schuster New York

Lim, P. (2016, August 17). 3 important lessons from the downfall of legendary stockpicker Bill Miller. Money.

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for the stock market. Forbes.

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investing turns into an ‘extreme sport’ – and Bank of America warns the worst is yet to come. Business Insider.

Winck, B. (2020, July 27). Tech stock rally is far from repeating the 1990s dot-com bubble,

SunTrust says. Business Insider.

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