God, Baruch hates that sodding Lex column. The serene superiority of the tone, and the sheer uselessness of the contents, make for a mind-numbingly stupid combination. I’ve written before of my contempt for the Economist’s stopped-clock investment style, but at least they take a view. You know that whenever there is a sunny outlook for the economy and markets (which is most of the time) they will foretell doom; that is, up until something really horrible is going to happen, in which case they’ll suddenly cheer up and tell you to fill your boots.
Now the Economist will lose you money most of the time, but there is the chance that in a short-term correction in a wider bull market, or for a few months before the crash, you might make some. Even a stopped clock, as they say, is right twice a day (using the 24-hour format, as I fear the Economist does, only once of course). Reading Lex is enough to make sure you never make money, or lose any, because you’ll be too confused about what you should actually be doing to invest in anything.
This is a shame, because I think people actually read the column in the hope that it may help them give them context outside the “on the one hand, on the other” conventions of simple reporting and somehow let them know what it is they should be doing. The typical reader would be financially literate enough to suspect that most investment research, by the time it hits the retail punter, is hopelessly biased. They don’t want to be Blodgeted. They want to know what the smart money would be up to, and maybe they follow it themselves. Lex knows this, and the personal finance angle is exactly how they present themselves; from the “About” section of the website:
In its early days, there were no financial analysts, so Lex filled a need for critical and acerbic analysis of company results and strategies. Today, with analysts’ independence under question from all sides, it still provides an impartial and unconflicted commentary.
Baruch considers himself the smartest of smart money in the narrow niche he has chosen for himself. He generally knows the biases of the sources he uses. He’s surer than most about the things he doesn’t know. As such he rarely reads the Lex, nor its poorer cousin, Breaking Views. He did the other day, out of pure curiosity, as it concerned a question he had been wrestling with in his team: what to do about Apple (AAPL) ramping in front of the iPhone launch? Is the hype appropriate? We’re exposed either way, long or unowned due to the magic of benchmarking. We’re currently making the underweight bet, hoping that something minor will derail the launch, or, more likely we’ll get a “sell the news” reaction. Also, frankly, we have so many other ideas we need to devote our scarce capital to, we haven’t really been able to find enough to sell. Anyway, that’s our bias. What did Lex have to say?
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