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Tuesday, July 19, 2005

The Press and Accountability -

ArcaNews has published plenty of posts regarding analysts that put out reports that strongly state their negative outlook for AX (i.e., Charlotte Chamberlain and Rich Repetto) only to be proven totally inaccurate after several days, weeks and/or months.

Now it's time to hold rags like the Financial Times and Barrons -- two name-brand publications that often mislead investors, but insulate themselves through the name of their paper.

During January 2005, the Financial Times published a report that stated that Archipelago was the front-runner to acquire Instinet. History certainly proved FT wrong here -- dramatically wrong. In fact, a 7-yr. old could make a claim that GE is the front-runner to acquire Disney, and they'd be just as accurate as the FT -- when you're wrong, your're wrong.

Next, lets look at Barrons. To be sure they publication is loaded with financial data, but it's when they start to postulate that they run into problems. A gander back to the July 24, 2005's Barrons illustrates their bone-headedness as they pronounced MSFT a growth stock. This was actually their cover story -- complete with snazzy graphics, analysts quips, and all! MSFT closed at $28.66 on the Monday following this cover story. Today they are trading at ~$25.96 (note: MSFT did have a $3/share dividend bringing their price to $25.66 ex-dividend. A whopping gain of $0.30 cents -- not even enough to buy a copy of Barrons!

I encourage you to read through the historical posts on ArcaNews to learn how the same names continue to make the same mistakes. Henry Blodget had the misfortune of covering stocks that were front-and-center during the late 90's -- his inaccuracies have banished him from the Street and made his name synonomous with analysts that couldn't get it right.

Repetto and Chamberlain don't make CNBC and due to their coverage universe are not household names. Nonetheless, for folks interesting in accurate information, it's a good idea to ignore the cover of Sports Illustrated, and not take what's in the Financial Times, the Wall St. Journal/Barrons, or analysts research reports seriously.

2 Comments:

Anonymous Michael Santoli, Barron's columnist said...

It's amusing the way an anonymous commentator enjoys expounding on a supposed lack of accountability by media outlets such as Barron's. Our names and reputations our fully transparent for all to see and evaluate. And your recollection of a single Barron's cover story on Microsoft hardly counters the comprehensive review of our stock picks (published semi-annually), which as a group have beaten the market for the past couple of years. And that analysis doesn't even include, for example, the suggestion in my column in March that NDAQ was a Buy at $10 and change. You may be right on AX, but it won't be because of sloppy criticisms of AX skeptics.

2:06 PM  
Blogger amotleyfool said...

Thanks for stopping by. I really do appreciate your post. Just a couple of comments to respond to yours:

1) "It's amusing...anonymous commentator..." -- One huge difference between me and media outlets like Barron's -- I don't make money selling my thoughts, Barron's et. al. do.

Send me an email and I will give you my name and number. I don't put it out there, because I don't have a layer of insulation (like Barron's) to shield me from nonesense.

2) re: The group of stocks that have beaten the market for the past couple of years.

Barron's beats the Street cuzza crapstick -- if you throw enough crap against the wall, some if it'll stick. The market hasn't done much during the last couple of years so I'd hope your pros could beat an index.

3) re: NDAQ and 10 bucks -- good call! an incredibly low float, NMS, and Arca's successful IPO made the NDAQ IPO a fastball across the heart of the plate with a 3-0 count! Nice swing!

I sincerely appreciate your reading ArcaNews and I hope I didn't offend you. The latest article about AX in your publication coupled with the FT article prompted my rant.

7:16 PM  

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