Journos Together With Curt Sellers Getting It Wrong
The last post I suggested the Wall Street Journal may live existence played past times stock promoters (re Focus Media). I soundless recollect that.
Many idea I was existence harsh on journalists. In item they rightly pointed out that the shorts were spectacularly incorrect on Harbin Electric as well as the journalists (with a notable exception) were consistently right. I never wrote nearly that stock but I confess to having lost coin on the brusque - as well as was surprised at the takeover. My inside-Asia rumour manufacturing industrial plant life was insistent the bargain would live done but I did non believe them. [There inside-Asia rumour manufacturing industrial plant life does non insist the Focus Media bargain volition live done.]
Harbin reminds me (as if I ask reminding) that it tin become incorrect for brusque sellers (especially the song kind).
But it tin become incorrect for journalists equally well. The stock marketplace has a mode of reminding us nosotros tin all live wrong.
In the journalists-can-stuff-up lite I volition repeat the unmarried most infamous representative of journalists existence played past times stock promoters. This was Leslie Stahl's Sixty Minutes slice on Biovail (a Canadian pharma society alongside extremely dodgy accounts). Stahl swallowed hook-line-and-sinker the stance that at that spot was a conspiracy of brusque sellers determined to spread lies nearly the stock as well as destroy the society (and therefore the value of mom-and-pop investments). It was pitched equally evil hedge funds versus Main Street.
And it was solely wrong. Biovail was faking its accounts as well as it eventually dismissed the CEO Eugene Melnyk. Melnyk was subsequently banned from world companies inwards Canada as well as paid large fines inwards the US. But non until good after he completely hoodwinked Leslie Stahl.
All the brusque allegations were correct.
Sixty Minutes has at ane time taken downwards the piece which agency I cannot replay it to you lot inwards all its ignominy. However to the best of my cognition they never apologized to the people they defamed.
To live fair though non all journalists vicious for it. Joe Nocera of the New York Times was sceptical of the Sixty Minutes slice almost direct away. The Ludwig von Mises found (not my commons source) sided alongside Nocera.
In other words at that spot were expert reasons - at the fourth dimension Sixty Minutes went to air - to uncertainty the storey Stahl presented.
Sufficient bear witness as well as getting it wrong
We are all going to larn it incorrect sometimes.
Financial markets nonetheless are total of people alongside an incentive to study falsehoods whether it live stock promoters (as per Eugene Melnyk) or - dare I tell it - the strange short-seller. Because as well as so much coin is involved you lot tin safely assume that most sources are dripping alongside vested self-interest. And some are apartment lying.
The hurdle charge per unit of measurement for a fiscal journalist is thus high. "Anonymous sources only about the deal" is something that journalists should accept alongside caution. Double caution inwards mainland People's Republic of China where the fraud grade is high.
When fiscal journalists larn it incorrect they facilitate criminal activity.
Just enquire the haplessly played Leslie Stahl. Her study increased the profits of insider-sellers of Biovail at the expense of her Main Street audience. Oops.
I recollect the Wall Street Journal has been played hither only similar Leslie Stahl. And I could live incorrect too.
Give it iv weeks as well as I volition study back.
John
PS. I take away maintain spent a lot of fourth dimension trying to operate out what went incorrect alongside Harbin. Harbin Electric's accounts did non encounter the plausibility test. The society was actively misleading on many occasions - as well as yet the bargain did closed as well as whilst the higher upwards mentioned Asia-rumour-mill tells me the bargain volition live a failure it volition non live an abject failure.
There was something at that spot at Harbin as well as it was non obvious inwards the accounts.
Here is my best theory equally to what happened.
In some Chinese cities you lot were non allowed to purchase state unless you lot had an industrial trouble organisation to pose on that land.
So people started mistaken businesses to purchase as well as speculate on existent land.
Later they reverse-merged the mistaken trouble organisation (complete alongside mistaken accounts) into the the States market.
That was for most of these mistaken businesses the halt of it.
However inwards some instances (Harbin as well as at to the lowest degree ane other) the state appreciated as well as so much that the society was worth owning fifty-fifty though its trouble organisation was largely fake.
And as well as so a go-private transaction made sense.
The shorts were right that the accounts were nonsense. But they were incorrect on the thing that mattered. There was value at that spot - only non the value everyone thought!
You tin live incorrect inwards ways you lot never predicted. The unknown unknowns if you lot will...
J
Many idea I was existence harsh on journalists. In item they rightly pointed out that the shorts were spectacularly incorrect on Harbin Electric as well as the journalists (with a notable exception) were consistently right. I never wrote nearly that stock but I confess to having lost coin on the brusque - as well as was surprised at the takeover. My inside-Asia rumour manufacturing industrial plant life was insistent the bargain would live done but I did non believe them. [There inside-Asia rumour manufacturing industrial plant life does non insist the Focus Media bargain volition live done.]
Harbin reminds me (as if I ask reminding) that it tin become incorrect for brusque sellers (especially the song kind).
But it tin become incorrect for journalists equally well. The stock marketplace has a mode of reminding us nosotros tin all live wrong.
In the journalists-can-stuff-up lite I volition repeat the unmarried most infamous representative of journalists existence played past times stock promoters. This was Leslie Stahl's Sixty Minutes slice on Biovail (a Canadian pharma society alongside extremely dodgy accounts). Stahl swallowed hook-line-and-sinker the stance that at that spot was a conspiracy of brusque sellers determined to spread lies nearly the stock as well as destroy the society (and therefore the value of mom-and-pop investments). It was pitched equally evil hedge funds versus Main Street.
And it was solely wrong. Biovail was faking its accounts as well as it eventually dismissed the CEO Eugene Melnyk. Melnyk was subsequently banned from world companies inwards Canada as well as paid large fines inwards the US. But non until good after he completely hoodwinked Leslie Stahl.
All the brusque allegations were correct.
Sixty Minutes has at ane time taken downwards the piece which agency I cannot replay it to you lot inwards all its ignominy. However to the best of my cognition they never apologized to the people they defamed.
To live fair though non all journalists vicious for it. Joe Nocera of the New York Times was sceptical of the Sixty Minutes slice almost direct away. The Ludwig von Mises found (not my commons source) sided alongside Nocera.
In other words at that spot were expert reasons - at the fourth dimension Sixty Minutes went to air - to uncertainty the storey Stahl presented.
Sufficient bear witness as well as getting it wrong
We are all going to larn it incorrect sometimes.
Financial markets nonetheless are total of people alongside an incentive to study falsehoods whether it live stock promoters (as per Eugene Melnyk) or - dare I tell it - the strange short-seller. Because as well as so much coin is involved you lot tin safely assume that most sources are dripping alongside vested self-interest. And some are apartment lying.
The hurdle charge per unit of measurement for a fiscal journalist is thus high. "Anonymous sources only about the deal" is something that journalists should accept alongside caution. Double caution inwards mainland People's Republic of China where the fraud grade is high.
When fiscal journalists larn it incorrect they facilitate criminal activity.
Just enquire the haplessly played Leslie Stahl. Her study increased the profits of insider-sellers of Biovail at the expense of her Main Street audience. Oops.
I recollect the Wall Street Journal has been played hither only similar Leslie Stahl. And I could live incorrect too.
Give it iv weeks as well as I volition study back.
John
PS. I take away maintain spent a lot of fourth dimension trying to operate out what went incorrect alongside Harbin. Harbin Electric's accounts did non encounter the plausibility test. The society was actively misleading on many occasions - as well as yet the bargain did closed as well as whilst the higher upwards mentioned Asia-rumour-mill tells me the bargain volition live a failure it volition non live an abject failure.
There was something at that spot at Harbin as well as it was non obvious inwards the accounts.
Here is my best theory equally to what happened.
In some Chinese cities you lot were non allowed to purchase state unless you lot had an industrial trouble organisation to pose on that land.
So people started mistaken businesses to purchase as well as speculate on existent land.
Later they reverse-merged the mistaken trouble organisation (complete alongside mistaken accounts) into the the States market.
That was for most of these mistaken businesses the halt of it.
However inwards some instances (Harbin as well as at to the lowest degree ane other) the state appreciated as well as so much that the society was worth owning fifty-fifty though its trouble organisation was largely fake.
And as well as so a go-private transaction made sense.
The shorts were right that the accounts were nonsense. But they were incorrect on the thing that mattered. There was value at that spot - only non the value everyone thought!
You tin live incorrect inwards ways you lot never predicted. The unknown unknowns if you lot will...
J
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