Shocking Truth About Tabloids and Trading

We are gathered together today to review two ancient foundations of Business Press Maven thought, as they apply to this week's news.

The first is that when a business issue or event crosses over to the popular press -- especially the tabloid press -- there is often a lot of overreaction, inexperience and sensationalism at play, which can lead to investor opportunity.

It's called a Tabloid Trade. It can be a long or short.

Sirius and Stern

On that dark and stormy night when we first met, The Business Press Maven explained how this was happening with Howard Stern and Sirius(SIRI Quote). Stern is perfect fodder for the popular press and tabloids. When Fart Man went from terrestrial radio to satellite, he also went from the business pages to the tabloids, and it was covered like the moon landing ... only more so.

The tabloid trade was to short the spread between business reality and the tabloid portrayal of that reality.

From a business perspective, Stern's $500 million presence was going to do nothing but raise costs and expectations while not doing enough to save a flawed technology. Even assuming he and the technology would succeed, the wide and cacophonous coverage meant there was a spread between reality and the perception of the press ... something every investor has to have a keen eye for.

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