It is no surprise that the business media made a mistake in coverage of the all important talks between General Motors (GM) - Get General Motors Company Report and the UAW, which have reached a strike as of this very moment, but could turn before the editor hits publish. (Or more likely, three minutes after said event.)
The Business Press Maven was hardly shaken by the first miss. But what makes me want to bellow today, though, is that the business media double dipped into their tub of mistakes.
One week ago I wrote how comically divergent coverage of the discussions, which may hold the American auto industry's fate in its uncertain clutches, had been from publication to publication.
Since then, amazingly, things have gone from bad to putrid. Even from the same journalists with the same publications, reporting on whether these negations will end in success or failure has been wildly divergent. This within a week's time!
I'm officially shaken.
Worst of all, most of these lurching reports were written in the absolute terms The Business Press Maven warned you to beware of. For emphasis, investors need to be careful of
written about ongoing negotiations in absolute terms.
Last week, I pointed out how fluid negotiations for things like houses and pushcart hemp shirts were in our own lives and even bared my dark soul -- telling the tale about how, covering an impending bus strike late at night for a major newspaper, I almost made the mistake of my working life by filing a report that the strike was nearly settled.
That much younger and inexperienced me was awakened to news that -- between my deadline and the morning -- the bus drivers had walked. I had only (thank God and night editors) been saved by the grace and skill of a few of the red pen sorts who were experienced in the ways of the business world, where it is easier to pin a wave upon the shore than the precise direction of a labor negotiation.
Back to GM-UAW, let's review the carnage since last Monday. That day,
saw fit to run with a headline containing hackneyed and more importantly, foreboding, metaphor. Said Business Week:
UAW and GM: Stuck in Neutral?
The subheadline was quite definitive. The gap between the two sides was canyon wide: "After a grueling weekend, GM and UAW remain far apart on plans to fund an historic health-care trust fund." Compare that to
yesterday's subheadline from
(exact same reporter), which says the exact opposite on that central issue of health care: "The two sides are near agreement on a deal that would wipe out GM's long-term health-care liabilities while protecting retirement benefits."
Nowhere does the journalist mention how within a few days time, things were tilting toward totally different endings. Even if it meant taking a hit, that is what would inform investors the most -- shedding light on the thought that you should never invest on the strength (read: inherent weakness) of any one report about high-pitched negotiations in process.
Perhaps throwing a bone to reality, there is a single note down somewhat in the second article: "Negotiations Are Still Fluid." Music to my ears, but too little too late.
Investors, listen to The Business Press Maven instead of
: "Negotiations Are
Fluid. Don't overreact."
Far be it for me to pick on a single reporter from
, especially when there is single reporter from
The Financial Times
to pick on, too.
Here is the
headline a week ago:
Promise fades on GM talks with workers .
Talks with union leave GM upbeat.
Partly this sort of story has to do with the need for journalists to write stories with threads, defined themes and specific story lines. Things need, for purposes of coherent writing, to be seen as moving toward closure or collapse. A story line that says "a lot of people are talking back and forth and who knows what's happening?" won't read as well and will get them in trouble with editors.
But, and this is key, it will be more accurate and will better warn investors that reacting with their money as if talks are close or distant on the strength (read: weakness) of one of these reports gives you nothing but a one way ticket to financial Palookaville.
Interestingly, all it takes is a caveat, a warning set way up high in an article to let the investor know things appear headed this way, but might very well turn on a dime. Watch how
The Wall Street Journal
did just that this very morning. It led with the strike deadline set by the UAW for 11 a.m., but made clear that there has been an apparent twist, and negotiations, as they see it,
might be consummated.
But right there in the second sentence, the paper appropriately backs off from any absolute stance on something so fluid. Write Jeffrey McCracken and John D. Stoll responsibly: "The talks could still encounter obstacles..."
Indeed. So can you, savvy investor, if you take too much of this reporting as the God's honest truth. Remember this every time a negation rolls around and you see the exact same thing.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.