Bad Press
How business journalism helped inflate the bubble.

Pick up The Wall Street Journal today, and the business pages are full of stories about the men and women who built the stock market bubble. Months into the current downturn, the saga of Enron, WorldCom, Arthur Andersen, and other 1990s cheats has become the biggest running business story in decades--and business journalists are hot on the trail. Should we blame sticky-fingered CEOs? Self-dealing analysts and accountants? Board members asleep at the switch? Absolutely. But there's another sector of the economy, deeply implicated in the collapse, whose conflicts of interest, ethical lapses, and naïve enthusiasms have so far received little press attention: business journalism itself. (...)

Fallacy #2:We can give readers useful advice about which stocks to pick.

Few business journalists spend much time analyzing balance sheets. But even if they did, they wouldn't be of much help to folks trying to figure out how to invest their 401(k)s. This truth was forced on me when I set out to learn high finance (after years of writing about it) at Columbia Business School. Here I was, a 40-something guy on a fellowship for mid-career business journalists, surrounded by 20-something whiz kids who would shortly go off with their newly minted MBAs to dazzle Wall Street. And what was the first lesson our finance professor drove home? That even after spending two years and $60,000 at Columbia Business School, none of them would be able to outperform the markets except by sheer luck or inside information.
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thanks to Ethel the Blog