Herb Greenberg talks business journalism
by Chris Roush
Herb Greenberg is senior columnist for MarketWatch and is one of the top business journalists in the country because of his investigative reporting on companies.
His column also appears in the weekend edition of The Wall Street Journal. He joined MarketWatch after six years as senior columnist for TheStreet.com. He previously spent 10 years as a six-day-a-week business columnist for the San Francisco Chronicle. Before that, he was the New York financial correspondent for the Chicago Tribune, where he covered the food and restaurant industries.
Greenberg talkedÂ to Talking BizÂ News aboutÂ businessÂ journalism and how he does his job. What follows is an edited transcript of that e-mail conversation.Â
Q: How did you first get interested in business journalism?
A: Through the back door. It was 1974. I had just graduated from the University of Miami. I took a job at the Boca Raton News, then Knight-Ridderâ€™s smallest paper. They had a business section every Sunday. It was a â€œchoreâ€? that was rotated around the newsroom. When it got to me, shortly after I was hired, I did a story about how baggers at the Publix supermarket chain could rise to managers and make pretty good money. I had fun doing it. Remember, this was the post-Watergate era. Everybody wanted to be Woodward and Bernstein. I looked around the newsroom and realized nobody else wanted to do business. It was simple supply/demand.
I became the paperâ€™s first-ever business reporter. We were located in area where many wealthy retirees included a Whoâ€™s Who of corporate America. It was also a big convention spot with well-known speakers from business and economics. I started interviewing many of them, including the likes of Lee Iacocca, who lived there (wouldnâ€™t let me use my tape recorder), and then-Treasury Secretary William Simon (nice guy), who I tracked down on a beach. This was a heck of a lot more interesting than covering meetings of the cityâ€™s recreation commission. The irony is that when I was a copy boy several years earlier at the late and great Miami News, part of my job called for me to check in with a stock broker every day to write down in pencil the local â€œover the counterâ€? closing quotes. (Why do I suddenly feel ancient?) After that, I swore the last thing I would ever want to be is a business reporter. Most of what I learned was on the job, ratcheting up the education with multiple job changes â€“ each one putting me out of my comfort zone.
Iâ€™ve since covered virtually every industry in most parts of the country. And Iâ€™ve been blessed with a series of great editors. However, I like to refer to my days at Crainâ€™s Chicago Business in the early 1980s as the boot camp of my career, with Greg David, then managing editor â€“ now editor of Crainâ€™s New York Business — as the drill instructor from hell. It was an absolutely horrible experience, but also the most valuable. Itâ€™s the first place I learned about writing with â€œtensionâ€? and â€œforward spin.â€? Somewhere in your career (preferably when youâ€™re young) you need to work for a Greg David.
Q: Whatâ€™s been the biggest change in business journalism during your career?
A: There was the move of business sections from behind sports. There was the doubling, tripling, even quadrupling of business news staffs, many of which have since been cut by half, a third and a fourth. There was the generally more aggressive approach to business reporting at daily newspapers, which put business reporting on par with political and sports coverage. And there was the rise of competition from all kinds of media, including TV and now blogs.
But for me, hands down, the biggest change (which also happens to be the most important change for serious investors) was Internet access to SEC filings. SEC filings are central to what I do, and there is not a day Iâ€™m not on the EDGAR site multiple times reviewing multiple documents. Ease of access, almost overnight, changed how I do my job. We always had access. But those of us not in Washington, or without dedicated reporters at the SEC, had to pay exorbitant prices to have the documents faxed or sent overnight â€“ and then hoping they would be the right ones. Iâ€™ll go so far as to say the ability to simply search an SEC filing for certain words and phrases, using a computerâ€™s â€œfindâ€? function, is the single best tool in my arsenal.
Q: Youâ€™ve written for daily newspapers and for web sites. How does the business journalism differ?
A: It doesnâ€™t â€“- at least not the actual act of doing journalism. Itâ€™s more a matter of form, and along those lines there are two differences, and they apply to all types of journalism, not just business: You no longer are constrained by space, which means youâ€™re not forced to slice out critical copy, or the kicker, at the last minute because a story is too long to â€œfit.â€? And, at least in the earlier days, before newspapers starting wising up, you could be more competitive by not having to wait until the early edition of a paper to actually publish.
When I was at the TheStreet.com, I once beat my pal, Alex Berenson of the New York Times, with a scoop on AremisSoft, which turned out to be one of the great frauds. The difference between immediate and hard-copy publication made all the difference. Beyond that, journalism is journalism — online or off.
Q: You specialize in writing about companies that may be in trouble. How do you find your information?
Shhh! Donâ€™t tell anybody, but many ideas originate with tips from biased people who are short or long stocks â€“ that is, they have a vested interest. (Imagine that: Talking to people with a vested interest.) Back on the record: They also come from former employees, competitors and readers who just have a hunch about something. And sometimes they stick out like a sore thumb in SEC filings or press releases.
One of my best tips came from the analyst at a prominent mutual fund company who was trying to warn his portfolio manager of trouble regarding a holding, to no avail. (So, wise man that he is, he called me! He no longer works at the mutual fund and remains an excellent and valued source.)
But make no mistake about it: In my world, short-sellers can have some of the best information and are often smarter than the rest; they have to be because theyâ€™re betting against the crowd. For that very reason, they can be a lightning rod for controversy, as companies try to allege that there simply must be something nefarious. Yet nobody raises a fuss when reporters talk to people who are long stocks that might already be overly hyped. Â Reality is that Iâ€™m in the news business and if a person who has a vested interest one way or the other tips me to information that isnâ€™t generally out there it behooves me if the story interests me to check it out.
I always ask any source: â€œWhereâ€™s the proof?â€? Or â€œshow it to me in the documents.â€? That just gets me to the point of forming a hypothesis and then deciding whether I want to go further.
Q: Do you find it difficult to write about companies and people who donâ€™t want to talk?
A: Not at all. The brilliant and always insightful Allan Sloan, speaking at a SABEW conference a number of years ago, put it best when he said, â€œMore space for me, less space for you.â€? Still, it really does behoove a company to talk and sometimes, depending on the intensity of the story, Iâ€™ll give them a week or longer to respond. There are times, after hearing their side of the story, I soften the blow or even kill the story entirely. Other times, of course, their words bury them.
I was very early a number of years ago in writing about accounting issues at EDS. While interviewing the CFO, he I asked a question and he said, â€œYouâ€™re asking the wrong question.â€? Asking the wrong question? Thatâ€™s a classic spin tactic. At that point, I knew I had him nailed. More recently, I called Lululemon, a clothing company, to ask why their CEO had exaggerated on his resume. He and the company ducked me for more than a week. I then wrote a piece on the blog pointing out his exaggerations and half-truths. Then the CEO went on CNBC and said he was refuting what I had written, but he gave no detail. I immediately called his office asking for proof and details about where I was wrong. Iâ€™m still waiting for a response. That was two weeks ago. (I think heâ€™ll get this yearâ€™s Ostrich Award.)
Q: Your MarketWatch blog receives a lot of reader posts. Do you read them, and what do they tell you?
A: I have to read or closely scan all of them because I approve each one before it appears. Iâ€™m looking for anything possibly libelous, foul language or even spam. The idea is community and information, not the equivalent of a public message board, which can resemble a cesspool. And while I donâ€™t shy away from critical comments, and in fact encourage them (and often respond to them) I wonâ€™t accept the online equivalent of a heckler who wonâ€™t give up after a post or two. (This, after all, is my home. No need to clog the blog.)
As for what the comments tell me: They tell me I have a very bright, often emotional group of readers who are not shy about speaking up when they agree, but certainly when they disagree, with something Iâ€™ve written or said.
Q: Is there any difference between what you write on a blog and what youâ€™d report and write in another format? Why or why not?
A: Absolutely. In my world thereâ€™s the blog, thereâ€™s MarketWatch and thereâ€™s the Wall Street Journal. Each has its own personality. The blog is the most free-wheeling and immediate. I post to it directly, with no layer of editing. This is where I spend most of my time. The posts can be commentary, something reactive to the news, straight reporting or just an observation. Iâ€™ll also use it to let sources voice their views, as I did recently with a mortgage industry insider whose thoughts I felt needed to be published. (Might as well let him do it in his words, rather than have me try to regurgitate them like a story.)
As it turns out, that was my most highly trafficked post, generating more than 500 comments. MarketWatch, meanwhile, is like writing for a combination daily newspaper/news wire. Stories and columns are fully vetted and edited. The Journal is, well, the Journal, which means I tend to be a bit more straightforward in tone, with less attitude but not totally void of personality. And while I work hard for any story, even the blog, the 680 words I write for the Journal every week take more time and effort. One reason might be the multiple levels of editing, which can be onerous.
Q: How do you see online business journalism changing in the next 10 to 20 years?
A: More blurring of the line between what is and what isnâ€™t real journalism. People whose backgrounds and biases havenâ€™t been vetted can get instant credibility, through sites like Seeking Alpha, which can result in blog posts that get included under a ticker on Yahoo Finance. This is chipping away at the value of what we do. Doesnâ€™t mean what they do isnâ€™t good work. It certainly increases the competition.
Q: You also appear on CNBC as a guest commentator. Have you noticed any changes there due to the Fox Business Network launch?
A: No, certainly not in anything I do.
Q: Whatâ€™s the one skill that youâ€™d recommend a beginning business journalist develop to be successful?
A: Learn your way around SEC filings. They hold they keys to the kingdom. You never know what companies will bury in them. In the end, itâ€™s usually their own words and numbersÂ – there for the world to see — that will do them in.