Something Is Terribly Wrong, Just Not With Apple
Pardon my French, but with a few solid exceptions (they know who they are), the people who staff newspapers and Web sites that cover the stock market are lazy bastards incapable of or afraid to offer an original thought.
They follow a formula that contributes heavily to the very real notion of Wall Street as a rigged casino.
Make no mistake: What happened with Apple
It's not even a case of whether the WSJ report is accurate or not. That's not even the issue. It's the way the whole thing went down.
I hate to give the reporter who "broke" the "story," Juro Osawa, airtime, but it's important to watch this video he taped from a Rupert Murdoch-boiler room in Asia for the WSJ Web site.
Let's go over this.
As Osawa (first I had ever heard of him) notes in the video, "we" heard from "our sources" that Apple reduced iPhone 5 component orders. Typically vague. That's the first problem. We've become so desensitized that we no longer question the validity of statements such as people familiar with the situation. The media abuses these broadstrokes. I could use that line practically everyday to break a story, but I don't because I'm not a hack.
In the video, Osawa cites the possibility that "weak" demand is to blame. But, then, he goes on to qualify this by presenting alternative scenarios. The type of stuff TheStreet's Chris Ciaccia outlined in my article from early this morning -- If the WSJ Is Wrong About Weak iPhone5 Demand, Will It Apologize to Apple?
Will Osawa and the WSJ apologize for their irresponsibility? Will they be held accountable? Does anybody even give a damn? Do we even recognize what is wrong here?
His people familiar with the situation bunk aside, Osawa presented a relatively level-headed assessment of the situation in this video, which looked like damage control to me. However, when the Journal originally released the story Sunday night, its headline clearly stated the supply cut was due to weak demand. I wish I had taken a screenshot at the time, but, believe me, "weak demand" or something to that effect was in the headline.
Immediately, the inane financial media formula kicked in. One after the thoughtless and lazy other, Web site after Web site throws together a story, citing the WSJ, mindlessly reciting the headline that Apple cuts supply because of weak demand. Of course, that's the line that takes off. It gets in most subsequent headlines because, other than exceptions such as Ciaccia, few people have the ability to think for themselves.
Later, the WSJ decides to remove "weak demand" from the headline, but keep it in the body of the story. I captured a screenshot of that last night. (By the way, mad respect to the late Aaron Swartz. Part of me was uncomfortable with his picture showing up in this article but, then again, anything we can do to shed light on his suicide, depression and our backwards legal system is a good thing).
Instead of writing the smart story, seems to me the Wall Street Journal led with an assumption. Sure, your source tells you one thing. Fine. I don't buy it, particularly because we have heard this story before with iPhone 4s (Credit to cnet for the story from November 2011, and Twitter follower @noxid1974 for digging it up).
But that's how this game gets played. Reporters have carte blanche to beat around the bush and leave readers/investors in the dark in the name of protecting a "source."
At the very least, present the story -- out of the gate -- like Osawa presented it in the still-not-perfect, but much better and certainly moderated video clip from page one. Present it with some context. Be responsible. Don't treat other people's money with reckless abandon.
Of course, bigger fish exist for frying in the grand scheme of things. However, within the context of investing in the stock market as it intersects with the financial media, this is critically important.
You can't just come out with half-cocked reporting, move a stock and its derivative plays, call it a day's work and then go do it all over again next week. At least you shouldn't be able to when the hard-earned money of retail investors is on the line.
Where's the Securities and Exchange Commission when you need it? Busy getting after Reed Hastings for a Facebook post?
--Written by Rocco Pendola in Santa Monica, Calif.