As an investor, you have to give three cheers for indecency. Bubba the Love Sponge, Howard Stern and Janet Jackson appear to have sparked one of those great moments in the market when companies see their shares punished for reasons that have much more to do with the short-term crusades of moral fundamentalists than with the long-term trends of business fundamentals. Consider Clear Channel Communications ( CCU) and Viacom ( VIA.B), the companies on the bubble now for their supposed evildoing. Throughout the 1990s, Clear Channel sped across the nation from its base in San Antonio, Texas, like an unstoppable radio beam, electrifying and devouring every small radio and television station, mom-and-pop outdoor billboard operator and radio programming outfit in its path. From Jan. 1, 1990, to January 2000, Clear Channel shares advanced 8,700%, topping all major rivals -- Omnicom ( OMC), Disney ( VIA.B), Viacom and News Corp. ( NWS), to name a few -- by a country mile. The turn of the millennium was the only foe that the brilliant business campaigners at Clear Channel could not beat, and was it ever formidable. Starting virtually from the first day of 2000, its shares had fallen almost 75% by the fall of 2002, beset by falling ad rates, sagging programming and a generally foul mood on the part of investors. But the ad business, bread and butter to the radio and TV trade, has gradually bounced back along with the slow-loping economic recovery, and so have the fortunes of Clear Channel. Until getting the wind knocked out of it by the potty-mouthed antics of popular radio shock jocks in Florida and New York, Clear Channel had matched the rebound of the broad market through the start of this year, gaining about 35% from October 2002 through January 2004.
Thanks, Howard Stern
And now? It's down almost 10% this year, despite the modestly rising trend of the market. That drop is due largely to the negative publicity generated by a couple of out-of-bounds shows that led congressmen, in an election year, to call hearings on the problem of indecency.