Maven: Beware Paper Heroes

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No matter how many times they are ultimately discredited, the business media repeatedly makes paper heroes of CEOs for their managerial brilliance when it is larger trends that usually contribute the most to their success. Investors really need an order of protection from this kind of writing, because it leads to harmfully high CEO salaries and, even worse, overconfidence on the part of investors that a particular CEO can climb any mountain and forge any stream.

This morning, once again, the stock market is going to factor into the price of John Deere (DE - Cramer's Take - Stockpickr), the biggest farm equipment producer this side of Neptune, that it is being run by Robert Lane, philosopher-king. The Business Press Maven made mincemeat in July of a Wall Street Journal article that was so misleadingly worshipful of Lane and his managerial prowess that at least I had thought we had seen the worst. But this morning, Barron's has picked up the deflated ball and investors who read uncritically will believe once again that Lane hooked a tow chain to Deere and single-handedly pulled it out of financial oblivion.

"When Lane took the reins six years ago, Deere was wheel-deep in the red, struggling with the hangover of a vicious economic downturn..." Barron's starts bleating and doesn't stop, essentially going right along with The Wall Street Journal's kooky thesis that Lane had all but ended Deere's long-term exposure to economic downturns.

As The Business Press Maven's daughter says: "Whatever."

Nowhere in either article is the suggestion that Deere might just be benefiting from this lil' old thing called a weak dollar, which means that equipment exporters like Deere almost can't help but do well, with large and quickly developing countries like India and China snapping up equipment like there is no tomorrow. However, their economies could turn tomorrow, putting Lane's brilliance to the test, as could corn prices. Moreover, the Bush administration is all but throwing money out of helicopters to people in the farm states, but if Bush Republicans no longer control the government...

The Business Press Maven thinks Lane is decently good. But giving him too much credit (once again) for Deere's turnaround -- and implying that with him at the helm, a cyclical downturn can be skirted -- is a one-way ticket to financial Palookaville.

For the past two weeks, The Business Press Maven has been living a monkish existence, living off of bowls of steam as he spends up to 20 hours a day in quiet contemplation by his computer typing out his mantra: No matter how dismissive the business media was, the Hewlett-Packard (HPQ - Cramer's Take - Stockpickr) story is not going to blow over.

If nothing else, the H-P story has served as yet another example of how so many business journalists can be wrong so often about so much.