By: Tony Case
Investors’ newsletter publisher says simply reporting
stock performances does newspaper readers little good sp.
NEWSPAPER BUSINESS sections and personal finance magazines do readers a disservice, some journalists contend, by reporting daily or weekly stock performances without examining long-term market trends.
“It’s amazing to imagine that most consumer publications are oriented around just exactly the opposite of good, sound financial investing principles,” Robert V. Veres, publisher of the investors’ newsletter Inside Information, recently told the Society of American Business Editors and Writers. “By and large, these products are put together by nice people who give consistently bad advice.”
Veres argued that for the Wall Street Journal to report that the Dow went up so many points today is utterly meaningless in the scheme of things.
“It’s pure background noise,” he said. “There is no significance, whatsoever, to any of that information for the intelligent investor.”
Colin Stewart, business editor of the Patriot Ledger in Quincy, Mass., said that while most investors have little use for the endless pages of stock listings, newspapers have no choice but to run this short-term data. After all, the job of the daily press is reporting the latest news, not figuring out trends.
And Stewart has some trepidation about newspapers reporting how stocks perform over time, anyway, pointing out that past results are no guarantee about the future.
Consider a Princeton University study, which found that stocks that had performed well historically had no better than a 50-50 chance of being tomorrow’s winners.
Veres, while chiding publications for concentrating on the short term, admitted that predicting what’s going to happen on Wall Street can be chancy.
He thinks so-called experts who go on TV programs to make prognostications about the markets ought to wave a wand and rub a crystal ball while advising viewers, to “make it clear to the investing public that these people are engaging in an activity we discredited way back in the dark ages. There is no way of knowing what’s going to happen next week, next month or next year, whether we’re economists, journalists or mediums.”
Veres went on to accuse financial journalists of creating, intentionally or unintentionally, a “symbiotic relationship” with advertisers by sounding a message that supports what advertisers want to convey.
The ever-present conflict between advertising and editorial is one reason that Veres, a former editor of Financial Planning magazine and freelancer for the New York Times and other publications, got into newsletter publishing.
“There are no advertiser winds blowing through my consciousness,” he said, adding that the wave of the future in financial journalism is to “not take a dime from the mutual funds industry.”
DATE: Sat 30-Dec-1995
PUBLICATION: Editor & Publisher
THE PUBLIC ISN’T getting the personal finance news it wants from newspaper business sections, a survey has found.
More than anything else, consumers look to these pages for information about solving credit problems. But none of the nearly 1,500 sections studied by Robert K. Heady, publisher of the newsletter Bank Rate Monitor, addressed those problems head-on in their articles, features or columns.
“Personal finance is one of the hottest subjects around,” Heady said. “But what the survey says, in a nutshell, is that newspaper business sections and their readers are miles apart in terms of what dailies are running, versus what consumers say they need to help solve their urgent money problems.”
Heady looked at personal finance stories in 70 of the country’s biggest dailies, Monday through Saturday, for three consecutive weeks. He then compared them against 1,000 questions sent to him by readers of his weekly syndicated columns distributed by Tribune Media Services and Prodigy.
The findings were presented at the recent Society of American Business Writers and Editors Conference on Personal Finance, in Boston.
The personal finance-related subject most commonly covered by business sections was the economy and its relation to interest rates, accounting for over half of all stories. But only 3.8% of consumer questions pertained to this topic.
About 14% of readers had questions about credit cards, while only 3% of newspapers ran articles on the subject.
The topic of women and finance was covered by only 1% of newspapers, and was of interest to the same percentage of consumers. This, even though women constitute about 40% of all U.S. stockholders.
Electronic banking ? an important trend in the banking industry ? was virtually ignored by newspapers. It was covered in only 3.5% of articles. The public didn’t have much interest, either, as only 2% of consumers wondered about the subject.
Heady discovered a wide disparity between what’s important to newspaper editors and readers, and topics addressed in financial advertising.
Advertisements mostly dealt with CDs (31%) and home equity credit lines (27%). But the two categories each amounted to only about 1% of newspaper personal finance coverage. About 11% of consumers had questions about CDs and 2% were interested in home equity lines.
Basic savings accounts, such as passbooks and money market accounts, accounted for nearly 13% of the ads, less than 4% of newspaper pieces and about 1% of consumer questions.
When it came to mortgages, there was a close correlation between coverage, questions and ads. Nearly 12% of consumers had questions on the topic, compared with over 10% of newspaper articles and 7% of advertisements.
“It’s pure background noise,” he said. “There
is no significance, whatsoever, to any of that
information for the intelligent investor.”