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This file photo taken on Feb. 16, 2017 shows the New York Stock Exchange in New York.Bryan R. Smith/AFP / Getty Images

Several recent news items, taken together, serve as a reminder to investors: be careful what you read, especially if you are going to put dollars at risk.

Let's look at three recent items. The first was the Securities and Exchange Commission enforcement action against hustlers using the website Seeking Alpha to run an illegal stock promotion scam. (Disclosure: From 2006-08, I allowed Seeking Alpha to rerun some of my written work. )

The second item was the announcement of the 2017 Pulitzer Prize awards, given in recognition of outstanding journalism. The third was a very interesting column titled, "The ongoing challenge of content generation (and curation)."

That they occurred within a week of each other was serendipitous. Each relates to an important issue that affects everyone in the capital markets: who and what to read and how does that influence your views?

This is an issue I have long tried to drum into readers. The SEC action cited above is just one in a long list of pump-and-dump stock promoting scams. If it weren't so familiar, it might be more interesting. Of course, there are, as you might expect, several clear lessons for investors and traders who are trying to navigate their way through the thicket of news and noise:

No. 1. Know what you are reading: It may be obvious, but it seems to need restating: You should have more than a passing familiarity with those writing about finance. Authors, analysts, firms, websites, news organizations all have a history. You should be familiar with what they cover, their track records and any biases or conflicts.

It isn't always easy, but you should at least make the attempt. Obviously, I write for Bloomberg, and you might assume that I favor professional media outlets. But I have also maintained a blog for the past 15 years, and value the meritocracy of alternative information sources. I also have a money-management firm that favors low-cost investment over stock-picking and alternatives such as hedge funds or venture capital -- so my biases are there for all to see.

Investors should perform the same sort of analysis on any author, analyst or media they consume. Otherwise, they are unwittingly accepting opinions and commentary without an awareness of how they may be skewed.

You need to develop your own version of the Pulitzers, reading those who add value and insight and skip those who don't (or worse, mislead).

No. 2. Understand you consume media: There are many reasons to read financial news. However, if you are reading various websites or news outlets looking for some holy grail of stock tips or information telling you when to jump into or out of the stock market, you are wasting your time. It should go without saying that if anyone really had that information, they would be quietly using it themselves to gain a profit and not sharing it with the public. That this even needs saying should tell you how much time is wasted reading the wrong things.

Perhaps maybe one day, some algorithm will sift through the mass media and social networks to identify actionable and profitable data. One thing is for sure: The reader doesn't have that algo.

No. 3. Understand the motives of content creators: This goes beyond mere bias or conflicts of interest and strikes at the heart of the matter: What's in it for them?

I have long said that I write (to borrow an idea from Daniel Boorstin, the historian and former head of the Library of Congress) "to figure out what I think." But it is much more than that. Writing can be a branding exercise, for sure. But more important, it creates a record that others can examine for accuracy and credibility.

In an era of fake news, understanding who and what you are reading is more important than ever -- especially if you have money riding on it.

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Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of "Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy."

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