There are many journalistic crimes that the business media commit each day, but among the worst is that which Barron's committed on Saturday.
You see, Barron's saw fit to run an article that questioned with furrowed brow why a previous article that had appeared on its hallowed pages pounding the table on
great prospects did not move the stock. So already you know to be careful. These circumstances present a host of opportunities for self-justification and intellectual overreach.
The original article ran in February and, ironically, was one
. It made the case that Disney, despite investor worries about the impact of the economy on its theme parks, was a good long-term buy. Several weeks before
, I had even snarled at the business media for overweighting an emphasis on a one-time charge and not fully understanding how resilient Disney's earnings appeared.
They Just Don't Get Disney!
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At root: this is a company with a lot of modern brand franchises. Moreover, they have finally evolved past the old mindset that was ambivalent about moving past old paint-by-the-numbers characters.
Enter Hannah Montana, a gazillion dollar cultural juggernaut. Despite the tawdry photo shoot scandal involving its young star, Miley Cyrus, this franchise has become a wide-ranging jackpot for Disney. There is a gigantic element of serendipity and blind luck to such entertainment hits, but Hannah Montana has been best case scenario for the boys and girls at Burbank.
began its self-justification
by criticizing investors for not treating the soon-to-be released WALL-E like the automatic second coming of Hannah Montana. Look at this puzzling lead:
"FOR WALT DISNEY, THIS HAS BEEN THE YEAR OF MILEY, BUT COULD we be approaching the summer of WALL-E? If WALL-E -- the animated film (sounds like Wally) from Disney's Pixar studio due to debut in June -- does indeed join Miley Cyrus' Hannah Montana and become a hit and financial windfall, it would surprise a skeptical Wall Street."
Well then... Before you've ever heard a band play, you'd probably be safer not declaring them the next Beatles, and the savvy investor is right to be skeptical when it comes to a movie, any movie. But especially one that is designed to appeal to that most fickle bunch: kids. Again: there is a fine line between great success and total obscurity in the entertainment field. Assuming a high chance of success early on might then be the definition of careless, with all the undefined variables of taste and timing involved. This is obviously true not just of Disney, but also everyone from
Unfortunately, such flip, careless thought is no rarity. Shortly before the original
article bulling Disney ran, The Business Press Maven
mercilessly teased an analyst
(and I use the term loosely) for remarking that all you need to do when investing in entertainment companies is to find one with hits. Uh, yeah. That's all. Simple is as simple does.
Remember: be careful when Barron's prints puzzled articles asking why a previous article did not move a stock. Give Disney some time, it's a good company on the right long-term track, but be doubly careful when analyst or journalist treats success in the entertainment field like something you can put a finger on.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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