Why Financial Media Out to Shut Down the Voice of the Individual Investor?

Discussion in 'Trading' started by harrytrader, Apr 24, 2004.

  1. Why are Barron's and Other Financial Media Out to Shut Down the Voice of the Individual Investor?


    MICROSOFT CORP. (MSFT) Earnings Report:
    04/22/2004 After Market Close


    Why These Two Estimates
    Are Meaningless - Interactive Chart
    - MSFT Earnings Profile
    - Earnings Calendar

    Thomson/First Call
    Analysts Est. 0.29
    Analysts Est.
    Investor's Estimate 0.34
    Actual Earnings
    Per Share

    Commentary: The Microsoft whisper number was 32 cents. Actual reported was 34 cents. And the analysts were expecting 29 cents. Enough said.

    WhisperNumber's Wake Up, Edition V
    If You Look Real Hard You'll Be Able to Find One Absolute Truth Behind All the Lies and Deception
    Why are Barron's and Other Financial Media Out to Shut Down the Voice of the Individual Investor?
    Commentary provided WhisperNumber.com

    One thing we have yet to get used to is the amount of press coverage we receive and reading the humorous fiction that the financial press appears to go out of their way to write about us. For instance, we have read in quite respectable and trustworthy publications that a) we collect information from analysts (we don't), b) we've participated in numerous whisper number 'studies' (none cited by the press), and c) that our data, being based on individual investor expectation, could never be accurate or significant (it has been and continues to be).

    It's become so easy to spread these fictions through the internet (thanks mostly to lazy or just plain ignorant reporters who do all their research by typing in "key words" and then just repeat the same mistakes). And so we wonder that if we don't correct the record, then all of the investors either coming back to the market or just entering the world of investing may just end up being filled with a bunch of stuff about us that just isn't true.

    This weekend the well read and respected Barron's revealed its true colors. Although within the past year alone Barron's has recommended our services and published our survey data, they chose to show their bias in favor of analysts and investments banks when they published a one-sided and misleading story against our company.

    Christopher Williams, a reporter for Barron's, attempted to look at the subject of whisper numbers and, although presented with facts to the contrary, wrote a story that is about as misleading as they get. He left out a few obvious truths that we had personally discussed with him on the phone when he called our office last week. (We also provided these truths in writing to him and his editor after our conversation.) But maybe we should have known something was amiss when he stated upfront to us that he had no 'agenda' in writing the article. (Why did he even bring the word 'agenda' up?)

    In any event he did write a story about the so-called 're-emergence' of whisper numbers. He then tried to dismantle the credibility of whispers by sourcing an (apparent) study by Mellon Capital's Managing Director Ramu Thiagargian. This study, according to Barron's and Mr. Thiagargian, sourced 'earnings' data from our site and two other web sites that publish whisper numbers. The study then matched those earnings expectations to analyst's estimates. (The reporter didn't mention where the analyst estimates came from but we'll assume from Reuters or First Call.) But the reporter left out what we consider a few major facts about this story - facts that were discussed and reviewed in writing with this reporter.

    FACT ONE: We informed Mr. Williams that one of the companies that the study utilized whisper number data from, getwhispers.com, has been out of business for two years. Let me repeat that - they've been out of business for two years (no web site or phone number, no known existence - go see the website for yourself.) Yet somehow they contributed data to this study. We actually brought Mr. Williams to the website during our interview and showed him the 'nothingness'. We just thought Barron's was better than this and did more fact checking, rather than relying on just anyone's word and presenting this type of misleading reporting. Apparently not. You'll have to call Barron's for their 'opinion'. Mr. Williams can be reached at 212-416-2000 (or via email at Christopher.williams@barrons.com). You can ask for him, the editor of the story Robin Goldwyn Blumenthal, or editor and President Ed Finn.
  2. FACT TWO: The other website that the study collected data from, earningswhispers.com, has claimed in other press articles that they collect data from 'analysts'. That's right - analysts - not investors, traders, brokers, or monkeys, but analysts. But for some reason, they fail to disclose this or their collection methodology on their web site. We can only wonder why they don't list what they do and how they do it in writing. But it has been made public in recent articles quoting the founder of their firm that they collect data from analysts (the very source Mellon Capital is fruitlessly trying to prove 'better' or more valid.) Now, since this is our industry, every time we've seen mention of earningswhispers.com in a public medium, we contact the reporter and ask one simple question: 'Did you get an opportunity to speak with any contributing analysts to earningswhispers?' The answer has always been the same. No. We've even taken time out of our schedule to contact analysts directly to see if they have ever contributed estimates to earningswhispers. And the answer we've always received? No. You would think one analyst would admit to contributing data, but we can't find one, let alone the couple hundred or so that would be necessary to make up a database of estimates as found at this website. So we suggest you call them to find out and ask for ten or so contributing analysts - should be easy. The founder is Shannon Puls. You can get his phone number from Chris Williams when you call Barron's, because Mr. Puls doesn't provide one on his website, and when you send an email to him you only get an automated response. (By the way - we survey and collect earnings and investor sentiment from Individual Investors. We are very upfront about where our data comes from and disclose our methodologies in several places on our web site).

    FACT THREE: Mellon Capital (with support from the University of Utah and the College of William and Mary) claims to have used our database of whispers to support their study. Now here's the problem. No one from Mellon (or either higher learning center) has ever contacted us, discussed with us, or requested from us data. Was it stolen from our website? Stolen is a harsh word, but what's the definition of a stranger taking intellectual property from you without permission? (And the words fraudulent, steal, deceive, and mislead certainly are not beyond the capacity of a financial institution.) We have requested that Mellon provide any proof that they actually sourced data from us, which would be illegal without our written permission. (We have worked and cooperated with several well-known universities in studies where they requested our investor data. But believe us, we've never even heard of Mellon Capital until this weekend.) Mellon Capital can be reached at 415-546-6056, the University of Utah at 801-581-5701, and the College of William and Mary at (757) 221-2630.

    FACT FOUR: Put aside the fact the reporter has intentionally misled readers. Put aside the fact that the other firms don't exist and/or their data can't be sourced. Put aside the fact that Mellon Capital, the College of William and Mary, and the University of Utah appear to have stolen our data. The most important fact is perhaps the only truth that actually came out of the article itself: INDIVIDUAL INVESTOR EXPECTATIONS ARE JUST AS GOOD AS THE OVERPAID, OVERPRICED, BIASED ANALYSTS ESTIMATES! That's right; analysts are no better than just plain old ordinary investors. As Barron's and Mr. Thiagargian's study point out, (and we quote), 'the whisper numbers came within 9% of the actual earnings report - just as the analyst consensus estimates did, the study found." So for all of the billions of dollars that Wall Street brokerage firms and portfolio managers spend on their 'oh so amazing and reliable' 'analyst data', plain old 'average Joe investors' are just as accurate!!! Not hard to imagine, our data has shown investor's have been consistently more accurate over the past six years (maybe the other firms mentioned dragged the accuracy down a bit!). Maybe Mellon Capital's investors should be more upset that they pay thousands of their dollars for analyst research and earnings data. (No wonder Mr. Thiagargian's wants to put an end to whisper numbers, they may actually cost him his job as Managing Director at Mellon!)

    Now facts are hard to ignore, but why does the media continue to write about whisper numbers (most notably our whisper numbers) in a negative light (most recently the Barron's article referring to our information as 'noise')? And how can we be 'noise' when the only earnings data you're subject to in mainstream media is that of First Call or Reuters research? They refuse to cite our 'just as good' (we know better) 'noise'!! Or worse yet, how can the media ignore the value, significance, and proven accuracy of this data?

    Our company is small. We're growing but we're small. We pale in comparison to the billion dollar companies that Thomson First Call and Reuters/Multex have become on the back of analyst data. Yet the media continues to make attempts to compare our information to theirs. Unfortunately for us (and all investors looking for facts) they usually refer to us in some backhanded, negative way. But why is that? What is it that they are afraid of? Why not put that energy into a positive and well-researched article on the values of individual investor data? Or is that the problem. Are they just not willing to give the individual investor the credit they have earned and deserve. After all, an individual investor will never run a commercial on their network, or place a full-page ad in their paper.

    You can't rely on insiders and politicians to help protect you from atrocities that are now a common occurrence on Wall Street. These events are orchestrated and the people being hurt the most are individual investors. The Wall Street 'administration' hasn't changed, the SEC has yet to protect or reimburse you, and the media tows the party line.

    You can, however, make sure your voice is heard. Don't hesitate to send an email, a letter, or even make a phone call. The education you can gain with these simple acts will pay off in the long run. And sitting on your hands and doing nothing? Well, we'd have to say you get what you deserve.


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