If you’re a financial media pundit, you live every day with a fundamental challenge with respect to accountability and intellectual honesty. As your forecasts, opinions and views accumulate over the years, how do you reconcile what you are saying today (or failing to say) with what you said last month or three years ago?
If you once said a kind word about investing in Microsoft, are you forever obliged to track it, and let your readers know when your opinion changes? If so, then you are obliged to always have an opinion about every subject on which you ever had an opinion — at least until you officially “drop coverage” on an opinion (such as, “okay, I give up on Microsoft now”).
The best reporters and commentators that I talk to are aware of this issue, and try to deal with it as I do — as best we can, albeit inevitably imperfectly. But difficult issues of accountability and scruples don’t seem to trouble very many of the pundits out there. And it’s not exclusively their fault, either — the financial media audience wants its fantasies, and is all too eager to forget last year’s fantasies (and this week’s realities). The natural evolutionary response is the rise of a class of financial media whores, who shamelessly give the customers whatever fantasies they want. That’s the business they’re in, and they know it.
What better example than James Cramer? He churns out so much fantasy day in and day out for so many different media outlets that he couldn’t possibly keep track of it all — the only way he could possibly function is to wipe his memory clean every night and start over fresh the next day.
Here’s what Cramer was telling his customers on March 18, 2000 on TheStreet.com. The context: it was within days of the all-time peak of stock market prices and valuations. Wharton professor Jeremy Siegel, author of Stocks for the Long Run, had recently written an op-ed in the Wall Street Journal warning of dire valuation excesses.
“I really have no use for theoreticians of the market. They make you no money. We are in a casino-like market and I want to game the casino. The absurdity of a Jeremy Siegel from Wharton coming out with some statement about valuation and how he thinks it’s wrong is just poppycock. Valuation is what it is. If you could sell only thousands of dollars worth of stock at these prices, then I would be wrong. But you can sell trillions of dollars worth. So what does it matter if an academic says the prices are wrong. They are the prices. That is the hand you are dealt, so figure it out or get lost.”
Now flash forward to the present. Here’s what Cramer was telling them on November 18, 2002,
“Jeremy Siegel is one of the great ones. Anyone who has read Stocks for the Long Run knows that Siegel didn’t succumb to the craziness of the late 1990s. From his desk at the Wharton School, this towering financial professor penned a piece that ran the week the Nasdaq hit its high in 2000.This memorable piece said that while Siegel remained a believer in the long-term value of stocks, the prices of the Ciscos and the Nortels had just gotten too nutty and he wanted everyone to sell tech. It was one of the most stark and prescient calls I have ever seen.
“That’s why I paid extra close attention to Professor Siegel’s words as I shared a panel with him Sunday at Philadelphia’s Society Hill Towers as part of a fundraiser.”
There’s the usual trademark Cramer self-aggrandizing anecdotal tidbit — Cramer making Cramer seem towering by his proximity to people Cramer says are towering. But nowhere in the 2002 column is there the slightest reference to the 2000 column. There’s no explanation for the total 180.
But why should there be? It’s obvious, isn’t it? Another day, another fantasy. Today’s customer wants you to whip him with a feather boa. What’s the point in telling him about the customer three years ago who wanted you dress like a dog and crawl around the bedroom?
