Tag Archives: TheStreet.com
Biz media miss the obvious with Dell
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TheStreet.com’s Marek Fuchs wants to know why the business press coverage of Michael Dell returning to the CEO spot of his computer company elicited no coverage about how easy it’s going to be for him to turn the company around.
Fuchs wrote, “Recently, Dell announced a return to the head spot at his company, and the business media spent an entire week describing his return as a matter of serendipity: Dell, they wrote in their universal drone, had finally grown tired of the bad earnings performance and somehow awoke one morning transformed into someone who wanted to take matters into his own once-capable hands.
“Their limited ability to think critically was spent on the bleedingly obvious by saying that Dell, capable or not, would have a tough time turning Dell around.
“Like, duh.
“Finally, on Monday, The Business Press Maven decided he would rather be hacked apart by a pickax than read one more of these stories. None framed Dell as the master of business timing that he was, who left his company the moment his troubles began and came back essentially the day that Vista, Microsoft’s operating system that was undoubtedly going to lead to a spurt in computer sales, was released.
“Put that in your serendipity and smoke it.”
Read more here. Fuchs argues that the business media should be able to realize that Vista means more sales of computer hardware, which means good times for Dell.
Business press wrong about weather and oil prices
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TheStreet.com’s Marek Fuchs points out that Reuters and the Associated Press are getting it wrong when tying changes in the weather to prices for crude oil in the commodities market.
Fuchs wrote, “Let’s start with a headline from this morning, careful not to ensnare our pant leg on too much nonsense. Reuters, in its infinite lack of market-moving wisdom, yells, “Oil above $59 as cold bites, OPEC cuts supply.” Not to be outdone in overdoing it, Associated Press did the same.
“In the Reuters lead, we are told that oil prices climbed back above $59 a barrel as ‘a blast of cold weather boosts heating oil demand.’ Got that? We’ve had a warm winter, but a few days of freezing our measuring sticks off — at least in the Northeast, where a lot of journalists need to be sent off to their newsrooms by their mothers with their mittens — and oil is zooming. Onward, skyward and — well, you get the picture.
“But by only the fourth sentence, the theory that hit so hard in the attention-grabbing headline and lead, which many investors don’t read past, is already looking like a scared little rabbit. ‘The rally,’ opines Reuters, ‘has coincided with a drop in temperatures in top heating oil market in the U.S. Northeast.’ (Emphasis mine.)
“Uh, which is it? A direct correlation between the ‘cold biting’ and crude soaring? Or a total freakin’ coincidence? We can’t be neutral on this. The causes are contradictory. It’s either/or, neither/nor. And you wonder where good investors’ chronic mistrust of the business media comes from.
“The answer, of course, is neither.”
Read more here.
Press declares that housing slump is over
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Marek Fuchs of TheStreet.com points out that the business media have begun writing about the housing market as if it’s about to turn around when that may not be the case.
Fuchs wrote, “The Business Press Maven is always highly critical of the business media for allowing a pattern of three to qualify as a trend. But apparently now two can do the deed. The National Association of Realtors reported that sales of existing homes blipped up 0.6% in November, following a 0.5% increase in October.
“How did those modest little facts play?
“In its lead, the Associated Press declared that ‘the worst of the downturn for the battered housing market may be over.’ Lower down, it hedges, mentioning those ever-present and always plural ‘analysts’ who say that ‘this year’s slide in housing is starting to bottom out.’ The Business Press Maven seconds that with his first-ever ironclad guarantee. After all, with today being the last business day of the year, the housing market doesn’t have too much longer to slide in 2006.
“Reuters also ushers in a new era of stability, at least on paper (or, more accurately, in pixels), with what passes as reason: Wall Street was wrong, so it is right. ‘The National Association of Realtors said the pace of existing home sales rose 0.6 percent in November to a 6.28 million-unit annual rate, defying Wall Street forecasts for sales to ease slightly and providing the latest suggestion that housing activity was stabilizing after a steep drop.’ The AP even adds vestiges of housing-market insanity, disguised as a qualifier: ‘However, [analysts] cautioned not to expect a sharp rebound.’
“Even the 800-pound gorilla of conventional thought, The Wall Street Journal, got in on the revival act right there in a headline: ‘Home Sales Bode Well for Big Picture: Second Consecutive Rise Points to Limited Fallout From Market Slump in 2007.’ By only the fifth paragraph, we are in the thick of an imaginary scenario: ‘If the housing slump is indeed bottoming out and starts to reverse itself in the months ahead, it would…’
Read more here.
Amazon headline writers taking company's word
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TheStreet.com’s Marek Fuchs writes that headline writers this morning are simply taking Amazon.com’s word for its revenue during the Christmas shopping season.
Fuchs wrote, “Take the headlines written about Monday’s Amazon announcement, which in most cases appear to be just that: headlines superimposed on Amazon’s announcement. In this holy season, I thank God that at least the stock market, which appropriately sent Amazon’s stock down, did not seem to be as fooled as the headline writers were.
“Amazon, it goes without saying but I will, has probably gotten more mileage out of issuing these benchmark-number press releases and having the media take them as something substantial than any other company. Tuesday’s release was no exception to that rule.
“The company said, ‘Amazon.com’s 12th Holiday Season is Best Ever.’
“The wires were soon flooded with regurgitated headlines above stories that were essentially rewrites of the release. But there is only one problem with taking dictation from a company, and it’s that you lose any opportunity to draw any accurate, useful or interesting conclusions for investors. Take the Associated Press’ coverage; if the AP’s headline gives you déjà vu, well, it should: ‘Amazon.com Has ‘Best Ever’ Sales in 2006.’ The subheadline lends undue validity to that benchmark number the company was trafficking in, ignoring for the remainder of the article the interesting aspect of the number: ‘Amazon.com Says 2006 Holiday Shopping Season Peaks With More Than 4M Orders Placed in One Day.’”
Read more here.
The most worthless line ever in business journalism
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TheStreet.com’s Marek Fuchs was all beside himself after listening to a National Public Radio “Marketplace” segment on what the election results will mean to the stock market.
Fuchs wrote, “It opens with the lead-in from the host, ‘For some on Wall Street, gridlock is not such a bad thing.’
“At that, The Business Press Maven was all ears.
“But I wanted to plug them when I heard this feeble thesis line, right after the microphone was turned over to the reporter: ‘But not every economist thinks alike on this.’
“This may be the most worthless and weak line in business journalism history. Not every economist thinks alike on anything, even what day of the week it is.
“Still, I had hope.
“Maybe the point of the report was that though the stock market has been anticipating gridlock with such glee, it wouldn’t turn out to be so good for stocks.
“A contrary take? No such luck, as the report’s conclusion shows: ‘The equity markets would fare well under divided government, say some analysts, but others say a Democratic win in the House could make things difficult for some sectors.’
“This is like a weatherman telling you that it might be sunny, unless, of course, it rains.”
Read more here.
Fuchs: Retail sales coverage all over the place
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TheStreet.com’s Marek Fuchs notes that recent coverage of July retail sales data was all over the place, with some business journalism outlets reporting that sales were affected by the hot weather and others stating the complete opposite.
Fuchs wrote, “Let’s start at the beginning of the alphabet with the Associated Press. They told us that worried retailers got a reprieve in July, ‘scoring solid gains as searing heat in much of the country sent consumers back into the stores in search of summer clothes.’
“Walking this line of thought, you have to believe that people sitting at home in the comfort of central air suddenly rushed out into the heat in order to get tank-tops, whereupon, mission complete, they returned to the comfort of their central air.
“From that idea in the lead, we are then warned later on in the story not to over interpret the month, because it’s one of the least important on the retailing calendar, one in which stores are cleared out to make room for fall lines. Next, an economist told us that high temperatures can be both good and bad for retail.”
Later, Fuchs pointed out, “Speaking of heat stroke, in the middle of the alphabet, MarketWatch was telling us this in a headline: ‘Blazing temperatures damage July retail sales.’
“Remember that lead about people rushing out to shop for summer clothes. Here’s MarketWatch: ‘Scorching temperatures throughout much of the country kept consumers indoors in the final weeks of July, but strength in the first two weeks helped many of the biggest retailers turn in robust sales.’
“Wait, does L come before M? Whoops. Because in the lead to its article, ‘Retail Sales Better Than Expected,’ the Los Angeles Times had something else altogether: ‘Retailers logged sales that were generally better than expected in July as temperatures sizzled and shoppers picked up summertime bargains while cooling themselves in malls.’
“Got that? It wasn’t the cool clothes, but the cool malls.”
Read more here.
The real test for the Fox Business Channel
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Jonathan Berr, writing on bloggingstocks.com, makes the point that whether the upcoming Fox Business Channel is successful depends on how well it attracts viewers during slow business news days.
“The Achilles heal for all-news networks, like Time Warner Inc.’s CNN, is that many people only want to watch them when there’s big news such as the death of Anna Nicole Smith, the president’s State of the Union speech or Hurricane Katrina. When it’s a slow news day, viewers go elsewhere.
“Part of the success of News Corp.’s Fox News is that people tune into ‘The O’Reilly Factor’ and ‘Hannity and Colmes’ when there’s nothing going on. Jim Cramer also attracts viewers to his show on General Electric Co.’s CNBC when the market is dull. (I used to work for TheStreet.com, which Cramer co-founded.).
“I am not sure whether people are going to be tuning into Neil Cavuto in droves, but the question investors need to ask is whether there is enough business to support a second cable business news network. CNBC’s struggles are well-known and other cable news channels have failed, but it still remains a decent money-maker.”
Read more here.