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It is not often that The Business Press Maven disbelieves his own press. And I normally, of course, need oversight like a fish needs a bicycle.
But someone who vilifies others should do the same to himself ... in those odd, highly infrequent circumstances where he is as dopey as the rest of the business media.
That brings us to Round Rock and
The company, which had to stay silent because the feds are lurking about (you know how that can be), released earnings yesterday, without a conference call or any other direct contact with the public. But my
has nothing to do with yesterday's earnings or management hiding under desks in Round Rock, Texas.
Knowing the Customer
wrote recently about Dell's move to sell to consumers through
. This is an obvious departure from the direct-selling model that has defined Dell for years, and The Business Press Maven was right to say that the move should have been judged against an old quote by Michael Dell, who said after an experiment selling through Sam's Club more than a decade ago that it was nearly impossible for Dell to make money selling that way. Most of the business media, without a Dell official to talk to, instead pulled quotes from the press release about how fine and dandy things would be.
But I also portrayed the fate of this current attempt at retail as absolutely central to Dell's success. I said that the endeavor could "save the company" or "fail miserably." And I was not, mind you, technically wrong. But that is the point with so much in the business media, so I need to explain. Subtle shadings of perspective -- not outright errors -- are the cause of so many long-term misperceptions bandied about by the business media that seep into investor thought.
Again, they're not trying determinedly to mislead; it's more a case of lazy intellects that, almost subliminally, cause misperceptions.
What, pray tell, is The Business Press Maven talking about?
Read almost anything you can get your hands on about Dell. (It won't, of course, be the annual report, which still hasn't been released.) I'm talking about business media anyway, including myself. On the basis of stories about how Michael Dell started selling by mail for good prices and stories about the Wal-Mart experiment, you get the sense that Dell is all about selling to consumers.
But as a 26-year-old reader, the little upstart, pointed out to me, less than 20% of Dell's revenue and even less of its profits come from the American consumer. Although the Dell lore has it selling to consumers -- and although many journalists (like me) have bought from them -- the central question is what Dell is doing to sell to businesses.
Dell's image in this commercial sector, as my 26-year-old archnemesis points out, is related to the consumer business, though I'd add that it would be less so if reporters (like me) were clearer about just whom Dell is selling to, on measure.
Here's a little snippet from the company's 2006 10-K. As you read about earnings today, make sure you are reading about a company that mostly sells to businesses. Otherwise, you won't be getting a clear picture.
The GDP Parade
Speaking of clear pictures, let's talk about the ultimate in cloudy. Did you see that the second of three GDP numbers was released yesterday? You
know the drill on this, and we'll get to that in a moment.
On a side note, we have an incredible spread of opinion. Here is an
Economic growth slows to a near halt."
The Wall Street Journal
Slow Growth May Presage Pickup." Hey, did Rupert already start writing the headlines over there? I thought they were just meeting today.
But the key, from your perspective, is to check whether the journalist gives you any sense that these numbers are revisions and open to one more future revision.
Too often, of course, the lamebrains of the business media draw tons of conclusions about the economy from each -- varying -- report.
We also got some data showing strong growth in the Midwest portion of the U.S. But read this
story and tell me what is missing, what should be there to explain the strength -- and its fleeting nature -- to investors. I'll give you a hint. Heck, I'll tell you. The Midwest has a good amount of manufacturing, and manufacturing has benefited from the weak dollar.
To put this strength in perspective, you need to include the weak dollar, which is temporarily propping up home prices in big cities, where foreigners have been buying.
Finally, for those of you looking to plan your summer vacations around the chance to catch sight of me for a brief moment (and, really, who is not willing to plan his or her life this way?), I just want to give you a quick, future date. I wrote a chapter for a non-business book,
Over the Hill and Between the Sheets
, which is being released on July 11. On that date, I'll be doing a reading at
in New York City's Columbus Circle, so if you're in the area, stop by and say hi.
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.