Of course we need journalists that will aggressively identify scam and overvalued companies etc...
We don't want journalists to be bullied.
However, who is going to protect us from those journalists that use their power to advance these scams.
Who is going to protect us from journalists that promote overvalued and scam stocks with large short positions in an effort to create unwarranted short squeezes that benefit the manipulators that are their sources?
Who is going to protect us from journalists that knowingly write misleading and biased articles that influence stock prices and damage shareholders by raising the cost of capital?
It's always difficult to tell the difference between incompetence, honest disagreement, and a journalist with an agenda to manipulate a stock for his own benefit or the benefit of a "source".
Much of the time you can tell though. Unfortunately, it's a lot like the OJ Simpson case in that sometimes you DO KNOW the guy is guilty, but you just can't prove it in a court of law.
In any event, nothing should be done to interfere with efforts to round these crooked journalists up so they can all be jailed.
I agree with you that there is some rotten journalism out there, and my book has some examples of that. When criminal statutes are violated, journalists should be put in jail. But remember that not all bad journalism is criminal, and also remember that not all supposed "bad journalism" is bad journalism. Some of it is just journalism that people don't like.
The one problem I have with the "journalism that people don't like" argument is that it makes it too easy for people that have unethical intentions to hide.
There should be some kind of standard that seperates truly subjective ideas from facts when it comes to financial journalism.
In other words, if a financial journalist writes a very negative article about a company, that could be very unsettling to those that own it and to management. Yet it could still be fine journalism.
However, if the information provided in that article is demonstrably false or biased, then those that own it and manage it have a right to be upset.
Now we have to ask ourselves is the journalist just mistaken or incompetent or does he/she have an agenda.
The job of the owners/managers is to then provide the accurate information and such a clear explanation that it pretty much can't be refuted by a reasonable, intelligent, and unbiased person.
If that is done and the journalist ignores all efforts from the company and shareholders to clarify the matter and continues to present a one sided view, is there really any doubt about what's going on?
The evidence is even greater when the journalist's source happens to have a postion in the security.
The reality is that the vast majority of financial journalism is favorable to the companies that it covers. The other reality is that the principal abuse that you see in financial journalism is overhyping, acting almost as PR people for the subjects of the coverage.
Another serious problem is similar to the above -- failure to give companies, and regulatory agencies, sufficient scrutiny.
That's the reality. Now, you say, in the context of a negative article, is "if the information provided in that article is demonstrably false or biased, then those that own it and manage it have a right to be upset."
Of course they do. But the other side of the coin, the one that is
far more commonplace and also far more troubling to investors, is when you have demonstrably false positive information disseminated.
When that happens, investors are hurt because they buy the shares of the stocks at an inflated price.
The same thing happens if negative information does not get reflected in the share price.
You need to think independently when you hear someone beef about media bias or, more particularly, the allegation that such-and-such a journalist is "corrupt." Allegations like that are thrown around a lot nowadays, and they disturb me for two reasons.
1. They smear hard-working reporters that don't deserve it and
2. They victimize investors, by convincing them to disregard negative information that may be correct.
As for your last point, which is an important one, reporters have an ethical obligation to disclose if their sources have a position in the company. That has been S.O.P. for most large news organizations for a considerable period of time.
ty for ur apt response. would've liked my letter written though.
Two sides to a trade , two sides to a story. ..Whats the ratio between positive and negative stories ? Was it ever studied ?
I agree wholeheartedly that favorable bias by journalists and the financial media is generally the bigger problem. That was certainly the case in the late 90s though 2000. It upset me terribly. I wrote endless letters to publications and networks during that period.
The issue is bias though - in either direction.
You shouldn't get a free pass if you write a bearish article "even if" you are generally correct about some negative issues at a company.
It's about intent.
If your "intent" is cleary to continuously spin facts and mislead investors in a biased way despite repeated corrections, you are just as guilty as the guy pumping a scam or trying to create an unjustified short squeeze.
Furthermore, movements of stock prices do not vindicate the journalism when in fact they can contribute to the movements.
The only thing that matters is the accuracy and balance of the journalism and how the journalist reacts to corrections of his/her work. His/her follow up reactions to corrections usually seals the deal about intent.
totally agree. The reporter in question never has responded to anything refuting his facts. Always the negative spin. When SEC clearance was made, no mention by the reporter. When margins improve, no concession that the company was doing things right, just more allegations of smoke and mirrors from the reporter and insinuation of fraud on the company's part. My take on it. 
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