My, my. We're sounding a tad defensive this morning.
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StumbleUponJim, let's face it. You've already pleaded guilty to my description of your crazed life and career. You admit in your New York magazine column that you are, just as I depicted, "a hard-driving, manic, emotional wild man given to fighting with friends, enemies, and everybody else as I clamor for respect." What blurbable material! If your fans (and detractors) want the gory details, they'll have to buy the book.
But in your effort to find something to criticize in The Fortune Tellers, you've now latched onto the notion that I find you a "hack" and a "boob" who doesn't make money for his clients. As you would say, wrong! I write that you had a tough year in 1998 but a hugely successful year in '99. I write that you're one of the few money-men who doesn't pose as an all-knowing, all-seeing guru. I say plenty of nice things about TheStreet.com as practicing the kind of skeptical financial reporting we need more of (while also noting that the stock, down by 90 percent since last year, has been a huge bust, as you have spent endless hours agonizing about).
You even trot out your greatest-hits lament about those who say you shouldn't dish financial advice every 11 or 12 minutes because you're in the financial trenches. Sorry, guy, I've never been in that camp. As long as you disclose your holdings, you can say any damn thing you please. Better that than the reporters who breathlessly tout market news based on unnamed sources who we all know have a financial interest in using the media to push a stock up or down.
I appreciate your recognizing that my behind-the-scenes narrative about financial journalists from Maria Bartiromo to Lou Dobbs to Ron Insana to Chris Byron is crucial to understanding just who these people are and the extraordinary pressures under which they operate. But again, you can't resist setting up a couple of barely strung-together straw men and mowing 'em down, machine-gun style. You say in the New York piece that the journalists who "get hammered the hardest" are the CNBC luminaries Mark Haines, David Faber, and Joe Kernen. Not! My portrait of them (which they all liked, lacking your discerning wild-man standards) was largely positive because they are among the best and most skeptical in the business. I was more critical of their "SquawkBox" colleague Maria B. (a k a the Money Honey) because she rarely questions the accuracy of the Wall Street upgrades and downgrades she so doggedly and exclusively reports every morning before the opening bell (though no one works harder at getting these scoops).
And your contention that I went easy on the "sell-side" analysts who work for all those hotshot brokerage houses? Well, let's see: I write about the ludicrous situation in which 99 1/2 percent of their recommendations are to buy, buy, buy stocks. I write about how few journalists press them on the blatant conflicts of interest when they evaluate the stock of companies their own investment banking firms are doing business with. I write about people like Merrill Lynch's Henry Blodget, an Internet cheerleader who continued banging the drum for Amazon even as its stock declined by two-thirds this year. I write about analysts who got pressured and even fired for being too negative—that is, too honest. Maybe I don't call for their tarring and feathering in your inimitable fashion, but I also try to reflect the point of view of the Blodgets and Ralph Acamporas of the world, just as I did with you. It's called—how you say?—reporting.
For the record, I describe you as one of the few Wall Street experts honest enough to admit his mistakes (like getting taken in by a stock hoax) as well as trumpet his successes (like riding the dot-com wave last year). And, whatever my criticisms, I clearly distinguish you from some of the hype artists in the book. So I know you'll want to reassess your rash charge that the only thing I managed to get right was Jim Cramer.
But hey, I'm not complaining. Hit me again! I need the publicity.
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Reader Comments from The Fray:
Cramer:
You are asking Kurtz to hit the sell-side harder when, in my view, your site, TheStreet.com, goes pretty easy on them. I'm aware that your writers want to make a specific point, but I don't think they should sacrifice facts to achieve that aim. Recently, one of your writers wrote about Blodget's internet sector downgrade and wrote that he was using the Neutral rating for the first time. That was untrue, but it made the downgrade sound like a bigger deal. In the past, I have been interviewed by your writers and provided background analysis of Merrill Lynch research calls. Re: the DCLK example in the book, you could have called Blodget to the mat if you had asked him why he was recommending internet stocks on which his price targets suggested negative returns.
Kurtz:
What's the big deal with ETYS? You are not providing the whole picture. Blodget recommended ETYS at a report price of $37.50 and with a 12-18 month price target of $50 (33% upside) and a near-term Accumulate/long-term Buy rating. Based on typical ML research guidelines, those specs would make the stock eligible for a downgrade at a price as low as $41.67. (The minimum appreciation threshold for a ML Buy rating is 20%.) ETYS actually went up more than 100% from $37.50. The problem was that when ETYS was trading in the $50s, $60s, and $70s, Blodget continued to recommend purchase even though he wouldn't raise the price target from $50. Even more puzzling is that ML let him continue to recommend it. If ML had enforced its own typical guidelines, ETYS would have been downgraded and you would have had to select among 20 or so other similarly bad performing stocks to highlight. By the way, in your book, you say that Blodget downgraded Amazon from Buy to long-term Accumulate. That is wrong. It was from Buy to Accumulate, both near-term (or in official ML language, intermediate-term).
--Bob Kim
(To reply, click here.)
Having read just the excerpt of The Fortune Tellers online, I have to admit that it looks like Cramer has a point. Howard Kurtz is probably right in general where insisting that someone trying to divine the vicissitudes of stock market aggregates or of the individual issues which comprise the aggregates from moment to moment is, more often than not, someone fumbling around in a blizzard--a raging storm of impossible-to-gauge elements which admit of very little visibility alone or in their concatenation.
But surely the more interesting story concerns not the impact of these "fortune tellers" or the conflicts and challenges they pose to market regulatory institutions but the personalities of the actors who have promoted themselves to a standing where pure visibility may equal or be confused with what power and elements drive markets in reality. Cramer is more interesting--and, not incidentally, more revealed--in his own words than he is in Kurtz's depiction.
--Mark S. Devenow
(To reply, click here.)
(9/28)