Truth, untruth, and consequences
Has anyone caught the brouhaha after Silicon Alley Insider posted the rumor that Steve Jobs had a heart attack?
Here's the link, and the comments (hate mail) on the post are interesting.
OK, first of all, I have to say, the fact that Henry Blodget could launch Silicon Alley Insider at all struck me as interesting, to say the least, to begin with. I hadn't forgotten his reputation during the dot-com boom/bust. Talk about falling from your pedestal. From '98 till '01 I worked for a start-up newswire that sent alerts about SEC filing information and brokerage reports, and Blodget's work at Merrill was always interesting, his were among my favorite reads among the analyst reports. Too bad he became the poster boy for all the craziness that went on, as well as the conflict of interest at hand. It's pretty bad when you're revealed to have been publicly touting stocks that you actually thought were garbage or dangerous.
So, the fact that he could go on years later after the tarnishment of his reputation and launch a blog was pretty mystifying to me. I guess our society has short-term memory loss? We are very forgiving? (Note the CEOs who have left their companies in shame, only to go on and head up some other company, or immediately be embraced by other companies' boards, so it's certainly not unheard of.)
Still, I read Silicon Alley Insider and enjoy it. Blodget is a good writer and analyst and has an acerbic wit. But I admit going to that site with a bit of an on-guard feeling, haha. (Then again, Bill Mann wrote a great article on Blodget's return in 2004, pointing out some important points about the whole thing, including the fact that in a way, Blodget was only doing what was expected of him in those crazy bubble times, and of course, how most people just want to hear good news and not a whisper of negativity: http://www.fool.com/investing/small-cap/2004/11/24/the-rehabilitation-of-henry-blodget.aspx. Interestingly, somebody posted a comment quoting one paragraph of that commentary that supported his own desire to bust on Blodget, but didn't acknowledge that most of the article explained what went wrong and why Blodget's return in a journalistic role was actually, in sum, a good thing for individual investors. I find that extremely ironic.)
At any rate, Blodget posted the Apple rumor that Steve Jobs had had a heart attack, admitted it was "citizen journalism" and utterly unsubstantiated, and said SAI was looking into it. The outrage that he would dare post something that was "untrue" (in quotes because it could have been true, and that would have been an entirely different outcome) is extremely interesting (along with the usual "you're short" mentality). The stock was moving dramatically anyway. Why wouldn't people want to know why, and then adjust accordingly (as in, yeah, some dumb Steve Jobs health/death rumor circulates every other week or so, so this is probably not true).
I don't see what on earth the big deal is about posting something as long as the person is underlining the fact that it's a rumor (and by extension, quite likely false). The really true thing was, Apple's stock was getting clobbered and there was a reason for it, as silly a reason as it might have been. It amazes me that people trade on rumors. In my 5 years writing for Fool.com, I've written some articles about rumor-fueled, dramatic stock moves, and included as my takeaway, "Hey, look, it's not really a red-hot idea to trade on rumors."
I think this kind of underlines something we really need to remember, now more than ever since the market's gone nutters. The best investors are calm and critical thinkers and not prone to panic (long term). Totally flipping out and joining the crowd makes you a short-term trader. Count to 10 and breathe. Stocks do silly things all the time (short term). And take responsibility for thinking critically and trying not to succumb to hysteria. And, information is information, and it's our job to weigh it on its merits (or lack thereof).