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Fidelity Managers Once Again Talk Stocks -- Carefully

The years-old ban appears to have been loosened, at least for the company's own publications.

After a long silence,


mutual fund managers are starting to talk stocks again -- but only in controlled surroundings.

The most recent example is in the annual report to shareholders of the gigantic


Magellan fund. Throughout it, manager Bob Stansky touts the stocks he likes best, including




Chase Manhattan







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and, most particularly,

America Online


, which he calls "the single largest positive contributor to the fund's performance."

And it's not just Stansky who is name-dropping.


Fidelity Outlook

, the slick new shareholder magazine unveiled last month, managers Erin Sullivan, Stephen Petersen and Dick Habermann all play the name game.

Sullivan, who manages the


Aggressive Growth fund, gushes over several tech stocks in the same spirit as Stansky. Petersen of the


Equity-Income fund and Habermann of the


Asset Manager fund, praise stodgier issues like

Philip Morris



General Electric



And in the March edition of Fidelity's monthly mutual fund guide,


Select Developing Communications manager Andrew Kaplan espouses the virtues of

MCI WorldCom



Of course, mutual fund managers talk stocks all the time. Just get sandwiched between two at a rubber chicken dinner. But Fidelity's managers have been closemouthed about stocks since an embarrassing episode in 1995 when former Magellan manager Jeff Vinik was accused of talking bullishly to the press about two of his holdings,

Micron Technology





, while he was actually selling those stocks out of his portfolio.

Soon afterward, Fidelity management sent out word that its managers would be mute on stocks when talking to the press.

Nowadays, Stansky isn't exactly tying up reporters' phone lines to talk up his latest buys. But the recent mention of stock holdings by Fidelity managers is a definite change.

"They squelched the managers entirely after Vinik left

in 1996. Then they loosened up and let them talk to the press, but they told them not to talk stocks. And then,

recently, I was on a conference call and there were a few stocks thrown out," says Jack Bowers, editor of the

Fidelity Monitor

, an independent newsletter.

"I guess they decided at some point that it was OK to talk stocks as long as they were long-term holdings," Bowers adds. (America Online, for example, was in Magellan's portfolio as early as 1994.)

But while Fidelity may be loosening the collars of its managers somewhat, it's only doing so in friendly territory -- namely, its own publications.

"They're not being interviewed by an independent third party, and they can have it reviewed by their legal department before it reaches our desks," says Donald Dion, publisher of the unaffiliated

Fidelity Independent Advisor

newsletter. "That way, they don't run into the problem they did a few years ago."

In other words, Fidelity gets to control the information -- another activity, besides great stock picking, for which the Boston giant is known.

"They're very control-oriented," says Eric Kobren, editor of independent newsletter

Fidelity Insight

, one of the first newsletters to cover Fidelity's funds. Kobren says when he first started his newsletter in the mid-1980s, Fidelity didn't take to it very kindly.

"Initially, they hated me. They had an AK-47 pointed in my window every day," he says from his Boston office. "Or at least I felt that way."

But he would not speak ill of Fidelity's policy of not talking stocks with outsiders.

"They really owe their allegiance to the shareholders, not to the press," Kobren says.

Dion says Fidelity knows it needs to do more to get the word out about its funds' improved performance.

"They sort of went into a shell, and when they got some better performance, people didn't really notice it," Dion says. "I think someone at Fidelity woke up and said, 'We're doing OK. We've got to let people know about it.'"

So has there been a change of faith at Fidelity? Hardly, says spokeswoman Lori Kelman-Seely.

"Our policy is not to talk about

stocks currently or futuristically," she says when asked about the three managers' comments in


. "But instead, what they can talk about is what has been the trend that they've perceived."

Or as Wendy Kincaid, editor of


, puts it, it really comes down to tense. The managers are on safer ground talking about what has already happened.

"We don't want anybody for a minute to think that Fidelity is taking a stand on a stock," says Kincaid. Talking about the article in her magazine, she says, "Our control over the information, really -- and I went through it word for word, and it was painful -- is to couch everything in the past tense."

Of course, shareholder reports are one thing -- they've always been a forum for managers to tout stocks, even at Fidelity. But in the case of the


article, the managers were talking to Larry Armour, a contributing editor for


magazine who freelanced some work for

Fidelity Outlook

-- in other words, a bona fide member of -- egads! -- the press.