Maven: Dell May Start on Second Base - TheStreet

Maven: Dell May Start on Second Base

Plus, examine the sore subject of missed larger truths.
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The Business Press Maven may be going to hell in a basket, but with apologies to the Grateful Dead, I'm not even enjoying the ride.

As always, it's the way I'm forced to read the business media's inability to see larger issues in little facts. Little facts are important, but assembling them in an article and leaving them be is a light lift. Drawing larger truths from those little facts is what takes the most brainpower, but in giving full shape to the bigger reality, it's also what helps investors the most.

It has been almost a week since Michael Dell announced that he will return as CEO to the floundering company he founded more than a fortnight ago. The nearly universal consensus from the business media has, this time, been right: Dell has a super-difficult task ahead of him.

Problems at

Dell

(DELL) - Get Report

, the Texas-based computer maker, are vast, and its old status might be irretrievable. From

Business Week

to the

Austin American-Statesman

(Dell's hometown paper), we heard all the hairy details about the challenges in product innovation, customer service and blah-blah-blah.

But is Michael Dell starting on second base? Or does he at least think he is starting on second base?

Hear me out. It may explain what the business media have not.

The Vista Connection

Michael Dell has forgotten more about good business timing than The Business Press Maven ever knew, if you can believe it. For a long time, it looked like Big Mike and Kevin Rollins, the recently departed CEO, were going to run Dell as a two-for-the-price-of-one managerial partnership.

But two years ago, almost to the day that the company's recent problems started to leach out into the stock market's focus, Michael Dell, not doing Rollins any favors, decided to let him run the thing himself.

Now he's back, and the business media did not think too hard about whether the timing of his return might be as flawless as that of his departure.

Business Week

, like most others, describes Michael Dell as "apparently...

running out of patience in light of the latest disappointment" in quarterly earnings.

Perhaps. But perhaps not. Why, after all, would he single out this particular disappointment vs. one of the many others? Remember, this is a man who has proved his ability to play Wall Street and the business world at large like a fiddle.

If someone can find one mention of the motivating reason, in all of the coverage of Michael Dell's decision to put his feet back into the fire at this exact moment in time -- i.e., the release of Vista -- please send it along. Though coverage of Dell's return could paper over Texas Hill Country, his timing is framed as serendipity: He woke up one morning and thought the earnings were especially bad. I haven't seen mention of Vista.

But Dell, who returned almost to the day that

Microsoft's

(MSFT) - Get Report

new operating system was released, figures that his company, coming off disappointing comparisons, can build some basic momentum as people (like The Business Press Maven) time their new computer purchases to accommodate the latest operating system.

Is Dell right? To a degree, probably yes. He'll have a built-in advantage: Even if Vista doesn't sell quite as well as Microsoft hopes, it'll still be an incremental help to troubled computer makers. Dell has a slightly better chance of showing some short-term success. The point, though, is that this is a larger connection that was clear and should have been made. From there, it could have been dismissed -- or extrapolated.

Despite the business media's largely measured expectations for Vista, does Michael Dell, in harnessing his return to its release either by design or by the business world's biggest coincidence ever, think it will be bigger than others seem to?

The Trouble With Activism

While we're on the sore subject of missed larger truths, I want you to read several articles about how the

New York Times'

(NYT) - Get Report

controlling family moved its assets away from

Morgan Stanley

(MS) - Get Report

in a fit of pique that a company fund manager has been banging the drum (a bass even) about how management is unaccountable to shareholders, with its dual-class structure of stock.

Here you have

The Wall Street Journal

,

CNNMoney.com

and more, all with just-the-facts approaches to the issue. Only the

Financial Times

puts it in the larger perspective that is the only thing that matters for investors, especially if they don't own stock in the companies directly involved. Said the

Financial Times

, of how shareholders at large are hurt by stunts like these: "It is another reminder why investment banks' fund management arms tend to shy away from taking activist positions against companies."

For-Sale Signs

One last quick order of business before I climb back into my basket: a hearty congratulations to

The Wall Street Journal

. Despite the newspaper's fixation on 1,423 economic statistics that don't matter,

it hit today upon one it usually ignores, which does matter.

You want a leading indicator of the housing market, one that tells you where prices are going and creates its own psychological momentum? Cue the homeowner vacancy rate. It is kept by the Census Bureau and is mysteriously subordinated by the business media. While allowing that it gets little attention, the

Journal

finally gave it some.

Over the last three months of 2006, vacancy rates of homes for sale stood at a remarkably high record, 2.7%. It was 2% a year earlier and, before last year, had never gotten above that (dark) magic number of 2. When houses for sale are vacant, it often means that sellers are living in another home, paying two mortgages and, presumably having trouble unloading the home, are willing to slash prices. They are serious sellers. Vacant homes with for-sale signs also put a heavy psychological weight on the housing market. "It just don't look good," as they say. Anyhow, this is the first number I pay attention to. It holds a larger truth.

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;

click here

to send him an email.