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The Times Muffed It on Bear-Buffett -- Did You?

A simple game of 'source analysis' should have made investors skeptical.
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Did you hear the splendid news? Warren Buffett might be buying a portion of this column. He is in "serious talks." How do I know for certain? Well, someone briefed on the discussions told me.

Does "people briefed" sound a little sketchy, a bit thin? Does it not make much sense that Warren would want to own this lame column? No matter. Let's sit back and wait while


, all the wire services and pretty much every publication and blog from here to Timbuktu repeat the claim about the "serious talks" incessantly, with it sounding more like certain fact with each round of repetition and groaning word play about Warren going Bear hunting.

Sad thing is, as readers of The Business Press Maven know from the two rounds of


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taking over



rumors, it all could have been

avoided with a simple game of "

source analysis."

It all started on Wednesday with a

New York Times


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column entitled "Buffett, Others Said to Consider

Bear Stearns


Stake." The Business Press Maven was surprised, as Warren Buffett doesn't have much history showing an interest in Wall Street firms.

True, he bought Salomon Brothers and eventually made some money, but that was years ago and the investment proved a huge, messy departure for him as he was forced to actually get his hands dirty and manage the thing.

But who knows what strange urges lurk in the heart of Buffett?

For all I know, he might be ready for a second exception. Or be making a mistake. That's why I zeroed in on who the source was on this story and tripped over the "people briefed."

I know we are probably going to be dealing with anonymous sources here -- that is acceptable -- but "people briefed" is simply too secondhand for me to take seriously. And if you ignore everything else I ever say, just remember that "people briefed" is nothing to invest your hard-earned money on.

"People briefed" could be those six times removed or those passing themselves off as in the know, to take advantage of a quick stock pop. As for the former, what the business media never understands -- but everyone experienced on Wall Street knows -- is that everyone talks deals all the time. But it's almost all exploratory.

That's why if you can't get any better than "people briefed," it can very well mean someone told by someone that Bear CEO James Cayne and Buffett had, at some point back in time, spoken. The following is a dramatization, but more often than not, these conversations run like this:

"Cayne, will you sell me 20% for a song and a few trinkets?"

"No, Warren, you are crazy. Subprime isn't that bad."

"Crazy like a fox -- the phone call only cost me a nickel. You sure you don't want to give me some incredibly favorable convertible deal?"

"No. Go away."

"OK, bye."

Interestingly, for those who see big truths in small shifts in language, by

the next day's newspaper, the "people briefed" were still there, but the "serious" was dropped from "talks."

Then there was this, which seems to speak to a version of the aforementioned conversation: "Mr. Buffett, in particular, reached out to Mr. Cayne about a month ago, these people said, when the stock was approaching its one-year low of $100."

"Reached out a month ago" -- hardly sounds like the "serious talks" that started the whole thing off. Who knows what the motivations of the "people briefed on the discussions" were, but the next line tries to keep alive the potential for the deal in as big a reach as you will see:

"While he is not known to be close friends with Mr. Cayne, Mr. Buffett might find more in common with the Bear Stearns boss than other Wall Street chief executives. Both in their mid-70s, they hail from the Midwest and are passionate bridge players."

Hmmm, bridge. That about seals it, huh?

I can hear Buffett on the horn now:

"Salomon Brothers was a huge headache, Cayne, but we are both geezers and -- this is key -- we both play bridge. That means you are almost obligated to give me those incredibly lush convertibles."

Anyhow, what turns this situation into something more dangerous than a joke is that, with so many media outlets around, thinly sourced rumors like this are repeated and spoken about so much that they gain automatic legitimacy.


immediately started to offer a huge body of work with titles like "Buffett Bear Hunting?" "Buffett Bearish," "Bear Hunting" and (get ready to put your tongue in a sling) "Buffett Buzz Buoys Bear." A constant cut above, Joe Kernan was, to his credit, quite skeptical.

But Thursday, just past noon, Bill Griffeth introduced a segment by saying: "Let's get to this Bear Stearns story. The story is that it may be close to selling a sizeable stake, perhaps to Warren Buffett..."

See? An unlikely story is put out there based on thin sourcing, but it's a story to run with nonetheless.

Griffeth then turned it over to the three person "

task force" he convened on the story.

Less than four hours later, on "Closing Bell," the "story" (yes, I used patronizing quote marks to make a point) had fallen apart, and Maria Bartiromo and Dylan Ratigan got all high and mighty on the


, holding their nose at the article and raising an eyebrow that someone should be getting in trouble for pumping and dumping the stock.

This, after


ran 100,000 segments on that same "story." That gets an official Business Press Maven "Oy." Even this morning, the tag on the Griffeth story is up on the Web site saying: "Bear Stearns may be close to selling a sizable stake to billionaire Warren Buffett..." Double Oy.

But, again, it all could have been avoided with a simple little game I like to call source analysis. If the sources on a merger deal story sound thin or (as in the case of


are all but nonexistent) do me a favor and ignore all the incessant chatter that will be guaranteed to follow, then fall apart in little bits.

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, 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;

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