That all said, I do see flaws in Alpert’s story.
First, while Barron’s could not of course mention the bitter struggle over the leak questions, it could have been more generous in describing Cramer and CNBC’s defensive posture. Their defensiveness stemmed in large degree from causes that readers knew nothing about.
Put another way: Would CNBC have been as defensive, absent the front-running questions? No way.
Second, Barron’s seems overly dismissive of CNBC’s (minor) victory using its database of 445 stocks. Yes, it is a highly selective collection based on unclear criteria of a fraction of Cramer’s total mentions. Still, given all that, he beat the market by 1.2 percent over two months, or, extrapolated over a year, 7.2 percent, which is good by any standard. Barron’s should have done more to deconstruct this list if it felt it was deliberately cobbled together to help Cramer win. Perhaps it is made up of Cramer’s researched picks. As it is, the reader does not know.
Also Barron’s unfairly moves the bar in discussing the performance of the CNBC list. After grudgingly conceding the 1.2 percent out-performance, Barron’s adds: “More important, the stocks fell short of the S&P by a statistically significant 2.2% through last week,” meaning August 18. But the period under review was January 1 through July 31, 2007.
That’s a gratuitous shot. Barron’s should have stuck to the parameters of the discussion.
Finally, the piece refers in passing to Cramer’s “then-wife, Karen;” the couple is still married. This gaffe is unrelated to the main thrust of the piece and was no doubt unintentional, but explains some of the lingering animus in the CNBC camp.
In the end, was the Barron’s piece a hatchet job, as CNBC contends? No, it really was not.
So, was CNBC wrong to throw Barron’s off the air? Actually, no. It’s its air.
Did CNBC behave unprofessionally, as Barron’s contends? No—except to the extent that its own policies force it into disingenuous arguments about what is and isn’t a “pick.”
This is the contradiction that the Barron’s story, and the subsequent fallout, have exposed. It’s up to CNBC to resolve it.
Its a very odd battle -- this stuff is infotainment.
http://www.ritholtz.com/blog/2009/02/barrons-vs-cramer-part-ii/
Posted by Barry Ritholtz on Mon 9 Feb 2009 at 12:47 PM
I think the Barron's-Cramer dispute matters a lot. While Cramer's jokey style is meant to act as a kind of disclaimer, he stands for a serious principle: that ordinary people trading at home can outperform the market. For most people, for most fund-managers, this is not true. It is a Wall Street myth, and not a harmless one. Jim should track his own results--using criteria of his choosing--and post them. Then people will have enough information to figure it out on their own. Until then, Barron's or someone else will have to do it.
Posted by Dean Starkman on Tue 10 Feb 2009 at 07:15 AM