I'm Not as Bad as Howie Kurtz Says
From: James J. Cramer
To: Howard KurtzPosted Thursday, Sept. 28, 2000, at 9:00 PM ET In his new book The Fortune Tellers, media critic Howard Kurtz examines the brokerage analysts, fund managers, and news outlets who distribute the information that makes the financial markets rise and fall, and finds many of them conflict-ridden, irresponsible, and glib (click here for an excerpt). In this exchange, James Cramer defends himself and his peers from Kurtz's charges.
Here's how I would use Howard's book. I regard it as an indictment of the short term. I look at it and I ask myself, did any of this stuff matter? It is all fun and interesting and at times wild, but does any of it matter? The Fortune Tellers is about the short-term dissemination of short-term news for short-termers. Long-termers need not apply. That doesn't mean it isn't fun or enjoyable or interesting to read about the short-termers, but I could argue that we are all, to some degree, irrelevant, all of us, to anything other than those who like to trade every tick. That said, I cannot change my view that Kurtz's damning of those involved in the short-term dissemination of news that momentarily affects stock prices is a false damnation. The news process, as opposed to the brokerage process, is relatively clean and nothing in this book would lead you to believe otherwise, except the title and the book tour associated with it.
Bottom line: Everyone asks me after my portrayal whether I hate Howard Kurtz. Here's my answer: "Not at all. I like him very much. I hate myself!"
From: James J. Cramer
To: Howard KurtzPosted Thursday, Sept. 28, 2000, at 9:00 PM ET James J. Cramer is president of Cramer Berkowitz, a $400 million hedge fund in New York, and a daily columnist for
TheStreet.com, a financial Web site he co-founded. Howard Kurtz is the media reporter for the
Washington Post and the author of
The Fortune Tellers: Inside Wall Street's Game of Money, Media and Manipulation (click
here for an excerpt and
here to buy it). The author of three previous books, including the best seller
Spin Cycle, Kurtz is also the host of CNN's
Reliable Sources.
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)
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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)