Doom and Gloom, Economic Voodoo Reporting
The following article appeared in the Yahoo News
Financial Section today (July 18, 2007) and caught
my interest.
This article is dry reading for most, will not
appeal to many, but I find it so typical of the
current 'attitude' about the reporting of stocks,
the stock market, and profits in general that I
did read it, and I'm glad I did.
Anyway, I would like to make it clear that I do not
fault the reporter for the following information. He
is reporting the typical economic news in the now
accepted manner and attitude of what is currently
considered important. It is not so much Voodoo
Economics as it is Voodoo Reporting.
The article is not complete, I have excluded some,
not all, 'opinion' paragraphs by investors and have
inserted [ ] comments.
__________________________________
YAHOO News
Financial malaise continues at Yahoo
By MICHAEL LIEDTKE,
AP Business Writer
Wed Jul 18, 2:57 AM ET
SAN FRANCISCO -
The company's shareholders [at YAHOO] have paid a steep price for
the company's bumbling. Since the end of 2005, Yahoo's stock price
has plunged more than 30 percent to wipe out about $20 billion
in shareholder wealth.
_________________________________
[Poor, poor YAHOO shareholders.
I own stock in one company--a gold mine in Africa. I purchased
about 5 or 6 shares some twenty-five years ago just to experience
the process. Over a period of the next six or seven years, I received
dividend checks about every other year and none of them were over
five dollars, and then nothing has been received up to the present
time.
The point is, like other investors, I BOUGHT the SHARES as a long
term investment. It was a one time purhcase of about $60. I have
not HAD to continually pay into either the shares or the stock
broker through whom they were purchased. So, no matter what the
stock did on the market, whether it rose in value or fell in value,
it did NOT affect my initial $60. That money was gone. Period.
It was money that, should I never get it back, I would still
survive.
Now, on that $60 investment (could also be called a savings
account), it 'earned' about $2.50 a year interest/dividend. This
was over and above the initial $60. Again though, it did not affect
that initial $60.
Had it so happened that the interest/dividend that the stock paid
back, say, had been $100 per year, then over twenty years, it
would have earned $2000. Another way to look at this is to say
that once that $2000 was paid to me, deducting the original
$60, I would have profited $1940.00 from a temporary $60 pay out.
If I should sell the stock for $60, then I have profited the full
$2000 and was only temporarily out $60.
Now, assuming that I hold on to the stock for another 20 years,
and over the next 10 years the stock pays nothing, I still have
the $1940 in my pocket. I don't lose anything!
If the company doesn't turn a profit in the next 10 years and
pay out a dividend, I still have the $1940. I do not have to put
money into the company. My choice is solely in buying more of or
selling off some of the stocks, not investing in its operating
capital. I don't have to lose anything.
Even if the company goes bankrupt, I still have the $1940 and
the initial $60 is still money that I can and will live without.
I will have made a profit on a bankrupt company!
Yet, as the article reads, the shareholders are LOSING money!
No they aren't. They MADE 20 million on their investment. They
still have that. YAHOO doesn't take it back if things suddenly
start getting tight. The investors have LOST nothing. What is
happening is that COMPARED to what they have made, they are
now not making anything or are making less than what they WERE
making. That isn't losing. That is writing off what you have
spent and pocketing the profits already made from that now
written off investment.
This is Voodoo Reporting and manipulation of attitude.
This is comparing 'what was' to 'what if' and accepting the
difference as some sort of concrete stark reality.]
__________________________________
But the patience of Yahoo shareholders may be wearing thin
after listening to Semel's broken promises of an imminent
turnaround.
The residual skepticism may give Yang little time to produce
higher profits before exasperated shareholders rebel and
pressure Yahoo into considering a sale to possible suitors
like Microsoft Corp., said RBC Capital Markets analyst Jordan
Rohan.
"This is growing old," Rohan said. "I would like to see more
immediate changes. Things are looking pretty bleak right now."
_____________________________
[The Macdonald syndrome--Invest at this window, pick up your
profits at the next window.]
_____________________________
Yahoo is pinning its hopes on a new advertising formula — known
as Panama — that rolled out this year, as well as partnerships
with online auctioneer eBay Inc., Comcast Corp. and more than
270 newspapers around the country.
But management offered little hope for better times this year.
After subtracting commissions paid to its advertising partners,
Yahoo expects its revenue for the full year to range between
$4.89 billion and $5.19 billion. In April, the full-year
forecast anticipated revenue from $4.95 billion to $5.45 billion.
In the three months ending in June, Yahoo earned $160.6 million,
or 11 cents per share, down from net income of $164.3 million,
or 11 cents per share, at the same time last year. [?]
Revenue for the period totaled $1.7 billion, an 8 percent
improvement from last year. But the overall online advertising
industry has been growing at a far faster clip, with Yahoo's
biggest rival, online search leader Google Inc., leading the
way.
_____________________________
[Chasing the competition instead of leading one's own parade.
And note, "Revenue for the period totaled $1.7 billion, an 8
percent improvement from last year." This is somehow tainted
as being a BAD thing according to the context.!!?? It isn't
that YAHOO isn't making money, the problem is, they aren't
making money FAST ENOUGH! And that's it! That's the gist of
the shareholders unrest!]
______________________________
Google's revenue soared by 63 percent during the first quarter
and analysts believe the Mountain View-based company will report
an increase in the same range when it announces its
second-quarter results Thursday.
The Internet ad market is on track to grow by 29 percent this
year, estimates industry research firm eMarketer Inc.
Excluding ad commissions, Yahoo said its revenue stood at $1.24
billion, an 11 percent increase from last year.
____________________________
[Uh, and this is somehow considered as not good!?!?!?]
____________________________
The earnings and revenue both matched the estimates among
analysts surveyed by Thomson Financial.
_____________________________
[Yep, Voodoo Reporting: A good reality is bad potential and
what's bad comparatively speaking is even a worse reality!
A good reality (an 11 percent increase)
is bad potential (everyone else grew at 29 percent) and
what's bad comparatively speaking (to what they did in past
quarters)
is even a worse reality (it's growth isn't fast enough)!]
--
If it is - illegal - for one man to kill another man,
How is it - legal - for 12 men/women to kill one man?
Financial Section today (July 18, 2007) and caught
my interest.
This article is dry reading for most, will not
appeal to many, but I find it so typical of the
current 'attitude' about the reporting of stocks,
the stock market, and profits in general that I
did read it, and I'm glad I did.
Anyway, I would like to make it clear that I do not
fault the reporter for the following information. He
is reporting the typical economic news in the now
accepted manner and attitude of what is currently
considered important. It is not so much Voodoo
Economics as it is Voodoo Reporting.
The article is not complete, I have excluded some,
not all, 'opinion' paragraphs by investors and have
inserted [ ] comments.
__________________________________
YAHOO News
Financial malaise continues at Yahoo
By MICHAEL LIEDTKE,
AP Business Writer
Wed Jul 18, 2:57 AM ET
SAN FRANCISCO -
The company's shareholders [at YAHOO] have paid a steep price for
the company's bumbling. Since the end of 2005, Yahoo's stock price
has plunged more than 30 percent to wipe out about $20 billion
in shareholder wealth.
_________________________________
[Poor, poor YAHOO shareholders.
I own stock in one company--a gold mine in Africa. I purchased
about 5 or 6 shares some twenty-five years ago just to experience
the process. Over a period of the next six or seven years, I received
dividend checks about every other year and none of them were over
five dollars, and then nothing has been received up to the present
time.
The point is, like other investors, I BOUGHT the SHARES as a long
term investment. It was a one time purhcase of about $60. I have
not HAD to continually pay into either the shares or the stock
broker through whom they were purchased. So, no matter what the
stock did on the market, whether it rose in value or fell in value,
it did NOT affect my initial $60. That money was gone. Period.
It was money that, should I never get it back, I would still
survive.
Now, on that $60 investment (could also be called a savings
account), it 'earned' about $2.50 a year interest/dividend. This
was over and above the initial $60. Again though, it did not affect
that initial $60.
Had it so happened that the interest/dividend that the stock paid
back, say, had been $100 per year, then over twenty years, it
would have earned $2000. Another way to look at this is to say
that once that $2000 was paid to me, deducting the original
$60, I would have profited $1940.00 from a temporary $60 pay out.
If I should sell the stock for $60, then I have profited the full
$2000 and was only temporarily out $60.
Now, assuming that I hold on to the stock for another 20 years,
and over the next 10 years the stock pays nothing, I still have
the $1940 in my pocket. I don't lose anything!
If the company doesn't turn a profit in the next 10 years and
pay out a dividend, I still have the $1940. I do not have to put
money into the company. My choice is solely in buying more of or
selling off some of the stocks, not investing in its operating
capital. I don't have to lose anything.
Even if the company goes bankrupt, I still have the $1940 and
the initial $60 is still money that I can and will live without.
I will have made a profit on a bankrupt company!
Yet, as the article reads, the shareholders are LOSING money!
No they aren't. They MADE 20 million on their investment. They
still have that. YAHOO doesn't take it back if things suddenly
start getting tight. The investors have LOST nothing. What is
happening is that COMPARED to what they have made, they are
now not making anything or are making less than what they WERE
making. That isn't losing. That is writing off what you have
spent and pocketing the profits already made from that now
written off investment.
This is Voodoo Reporting and manipulation of attitude.
This is comparing 'what was' to 'what if' and accepting the
difference as some sort of concrete stark reality.]
__________________________________
But the patience of Yahoo shareholders may be wearing thin
after listening to Semel's broken promises of an imminent
turnaround.
The residual skepticism may give Yang little time to produce
higher profits before exasperated shareholders rebel and
pressure Yahoo into considering a sale to possible suitors
like Microsoft Corp., said RBC Capital Markets analyst Jordan
Rohan.
"This is growing old," Rohan said. "I would like to see more
immediate changes. Things are looking pretty bleak right now."
_____________________________
[The Macdonald syndrome--Invest at this window, pick up your
profits at the next window.]
_____________________________
Yahoo is pinning its hopes on a new advertising formula — known
as Panama — that rolled out this year, as well as partnerships
with online auctioneer eBay Inc., Comcast Corp. and more than
270 newspapers around the country.
But management offered little hope for better times this year.
After subtracting commissions paid to its advertising partners,
Yahoo expects its revenue for the full year to range between
$4.89 billion and $5.19 billion. In April, the full-year
forecast anticipated revenue from $4.95 billion to $5.45 billion.
In the three months ending in June, Yahoo earned $160.6 million,
or 11 cents per share, down from net income of $164.3 million,
or 11 cents per share, at the same time last year. [?]
Revenue for the period totaled $1.7 billion, an 8 percent
improvement from last year. But the overall online advertising
industry has been growing at a far faster clip, with Yahoo's
biggest rival, online search leader Google Inc., leading the
way.
_____________________________
[Chasing the competition instead of leading one's own parade.
And note, "Revenue for the period totaled $1.7 billion, an 8
percent improvement from last year." This is somehow tainted
as being a BAD thing according to the context.!!?? It isn't
that YAHOO isn't making money, the problem is, they aren't
making money FAST ENOUGH! And that's it! That's the gist of
the shareholders unrest!]
______________________________
Google's revenue soared by 63 percent during the first quarter
and analysts believe the Mountain View-based company will report
an increase in the same range when it announces its
second-quarter results Thursday.
The Internet ad market is on track to grow by 29 percent this
year, estimates industry research firm eMarketer Inc.
Excluding ad commissions, Yahoo said its revenue stood at $1.24
billion, an 11 percent increase from last year.
____________________________
[Uh, and this is somehow considered as not good!?!?!?]
____________________________
The earnings and revenue both matched the estimates among
analysts surveyed by Thomson Financial.
_____________________________
[Yep, Voodoo Reporting: A good reality is bad potential and
what's bad comparatively speaking is even a worse reality!
A good reality (an 11 percent increase)
is bad potential (everyone else grew at 29 percent) and
what's bad comparatively speaking (to what they did in past
quarters)
is even a worse reality (it's growth isn't fast enough)!]
--
If it is - illegal - for one man to kill another man,
How is it - legal - for 12 men/women to kill one man?
posted by John | 1:10 PM
|
0 comments
