In the business we call them broken clocks: These are people who are right two times a day. The business, the investment business, is filled with them. They get their reputation from some great calls, usually involving the junk bond and real estate crashes of the 80s, or, of course, the great Crash of 87.
Only in our business could calls made a decade ago anoint you with the ability to get on television or be quoted
by every financial columnist in America.
If we were talking sports, would we really care now that Dan Reeves has been to a couple of Super Bowls? He's a bum when he loses, and a star when he wins. Would we really care what he has to say about offense after a sad-sack performance? Would we call in to a show of his to do anything other than razz him? I don't think so.
Or take Eric Lindros. Hockey's best last year, he's been hobbled by injuries this year. What's he but a bum? Hey, even Mayor Willie Brown from San Francisco got into the bum-calling act: He labeled 49er QB Elvis Grbac's performance a national disgrace a few weeks ago--and Grbac won the game. What would Brown have said if Grbac's performance resulted in a loss? I guess in sports, it's a what-have-you-done-for-me-lately world.
Well, I've got news for you, news that the press doesn't agree with, but nothing is more of a what-have-you-done-for-me-lately" business than the business of money. Here, you are only as good as your last trade. Except in the press: There you're good if you are silver-tongued, call back reporters, or have a silver quill.
We are trying to change that. We are trying to tell you which commentators and analysts are broken clocks, and which have genuine insight. We are trying to cut through the veil of professional camaraderie and the reporter-source symbiosis that so dominates financial journalism.
How are we doing on this score? I think so far, pretty good. We've highlighted a couple of investment firms that have pushed their underwritings on to recommended lists, at the detriment to you, the investor. We've turned a skeptical eye on a couple of underwritings that would have cost you money. And we've broken stories about companies that have lost key clients, something that could radically change the fortunes of the stocks behind the companies, even though the departures got nary a mention from the companies' shills on Wall Street.
But when it comes to broken clocks, we haven't been on the case enough. Daily I see a parade of people on television who are never wrong, who never call the market incorrectly, whose stocks always go up. Yet, I know, mostly from personal experience, that these wizards couldn't trade their way out of a paper bag.
Nevertheless, the press keeps holding them out as people we should listen to. Was that really Joe Granville I saw on television last week, virtually unscathed after his decade-long drought of good calls? Was that Jim Grant being trotted out by a half-dozen columnists, telling us that we shouldn't be in stocks, advice that surely has been dead wrong for 3000 hardly chimerical points?
has beaten up on Elaine Garzarelli, the poster girl of Wrong, the clock that was right just once (must be digital with an am/pm indicator). Too easy.
We will fulfill our promise to you when we regularly defrock not just the Kotites of our investment world, but the Reeves, too, the guys who have gotten it right, but too often get it wrong. Only then will we have succeeded in keeping you from synchronizing your investments with clocks that get it right only twice a day.
Speaking of clocks, broken and otherwise, some recent picks and pans:
for putting Gary Weiss's name on the cover, a rare break from BizWeek anonymity for his excellent story about the Mob on Wall Street. I've never traded any of the stocks mentioned, but this piece broke new ground for enlightening us about the small-cap sewer.
Pick: Jaye Scholl, for the dynamite little piece in
about the blow up of Theta and the aftereffects for Van Hedge Fund Advisors. As a trader who scorns fund-of-funds vultures, this piece was a real eye-opener.
Pick: Jennifer Steinhauer and Edward Wyatt of
The New York Times
for the breathtaking hatchet job on Leslie Wexner. I didn't even look at it in my first go-round because I figured it would just be one more puff piece about a man who only gets good press, after a decade of disappointing shareholders. Instead it was Wexner as a kind of Bizarro Walt Disney, making money for no one but himself building theme parks for the affluent. Bravo, for telling the truth about the Merlin from Columbus.
The Striking Price. Options shill Thomas N. Cochran once again trots out his two favorite sources: Mark Cook and Jay Shartsis, two guys who couldn't pay enough for this kind of favorable publicity week after week, and quotes them saying a few inanities about this week's action. As one of the most active option traders on Wall Street, I have two simple questions: who the heck are these guys anyway and why should we care what they say, particularly, because they seem like they are wrong just as much as they are right.
James Cramer is a hedge fund manager and co-chairman of The Street.