The Business Press Maven likes his reason served cold. So, he knew he was in trouble when the sports columnist for his local-yokel village newspaper took a break from his regularly scheduled puff profiles and laments about the state of youth sports to rail against oil-industry profits.
Join the angry mob,
part of me says. Oil companies, unlike most of us, don't have to operate in a legitimately competitive environment. So, to a large degree, whatever wooden nickels oil executives get spit at them are justified. But for the investor who wants to figure out what might happen next, pandering journalism, as bad as the dime-store demagoguery we get from the political sorts, does a disservice.
Let's take a deep breath and forget the populist instinct to poke an oil magnate in the eye. And think, maybe even counterintuitively, about what might happen next.
I've seen a small number of examples in this regard over the past few weeks, so let's have a pair of them share The Business Press Maven's sought-after "Anti-Mob Psychology" award.
The first is from
Stanley Reed piece about how those hated oil giants are actually in a vulnerable state. "Yes, we know it sounds ridiculous," Reed acknowledges right up top in words that by definition lean heavily against conventional wisdom and, as such, are often the soundest in the world of investing.
Though the major oil companies such as
Royal Dutch Shell
are raking in billions for the time being, Reed opines, they are having trouble (
big time, let's call it
) plowing much of that money into anything that will lead to future production; i.e., future profits, the only type an investor should care about. There are technological challenges, and the biggies are facing hostile foreign governments who do nasty little things like seizing their countries' gas fields. (See: Bolivia.)
Access to reserves in far-flung places, once taken pretty much for granted, is becoming problematic. The U.S. and British share of oil and gas production has shown to be in shrinky-dink mode in the past quarter century (from nearly 30% to about half that), according to Reed, and none other than T. Boone Pickens is given a guest appearance in the story ... to whine.
What's worse, with nationalized oil companies increasingly in the driver's seat, the oil companies have lost the pricing flexibility that allowed prices to stay high, but not alarmingly so, for so long. In light of these broad challenges, the article continues, oil companies are turning inward -- which in their case means depleting their older, more familiar fields at an even snappier rate.
"Big Oil has a future," concludes Reed. "But despite that gusher of profits, it's not an easy one."
Well done, Reed. After all, the business press has two major faults. One is standard-issue sloppiness, such as evidenced on the
recently when a man on a job interview was accidentally put on the air to comment on the
Records case. Like John mistaken for Paul, this interviewee was taken for an IT expert they had planned to interview. (The two had the same first name, which I guess explains it. Not.)
But the deeper problem facing the business press is a combined lack of imagination and courage of conviction. Reed, even if wrong, gave it a shot, as did Holman W. Jenkins Jr., who risked his neck in
The Wall Street Journal
to take a counterintuitive look at the macro picture of high oil prices.
In the space of one piece he called the age of easily accessible oil over and challenged the assertion that $3 a gallon gas is a big deal. (Why am I guessing that Mr. Jenkins doesn't commute by car?
Dude, I'm trying to like you and you're bugging me.
) He also posited that the much-trafficked idea that we are in any sort of addiction crisis is phony.
From an investor's perspective, you can only go so far with Mr. Jenkins, who veers off into some attempt at drawing a parallel with the welfare state and then defends oil honchos because they have to worry about their stock price. (
Dude, they do, but they also operate with more government protection than those in almost any other business.
) The point, as far as investors go, is that when populist notions grip journalists and you hear little but herd thought, there is often money to be made when you tack to the other extreme of that local sports columnist suddenly pounding the table about oil-executive pay.
Speaking of thought -- or lack thereof --
magazine took a break from listing the best plastic surgeons to list the most influential people on Wall Street. One nontelevision journalist made the cut, and who was this feared and revered soul? This man who makes CEOs quake with his in-depth looks at their long-term strategies? This woman who spots important money-making trends years before they are even a glimmer in the eye of most portfolios? Eh, the vaunted journalist was Gene Marcial, the "Inside Wall Street" columnist for
, Mr. Fishwrapper himself, a guy who writes mostly flaccid little capsules on three companies at a time, ending many sentences with "according to analysts."
capsule on Marcial allows that only short-term traders get anything much from what he says. Whether
highlighting of Marcial alone speaks poorly for the magazine or the strength of his fellow business journalists is probably an easy one to answer. Put me down for ... both.
And before The Business Press Maven leaves the limelight for a weekend full of gas burning, otherwise known as driving kids around, a quick matter of housekeeping. When the Maven put out an APB
a few weeks ago for examples of a woman CEO who gets coverage that is to neither extreme, reader Brandon Musler rightly pointed to Carol Bartz at
. You would win a free tank of gas, Mr. Musler ... if only I could afford it.
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 website 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.