Some Memories of CNBC
For many months in 1996 I watched CNBC 8 hours a day, 5 days
a week, to see if a stock trader can make a living from CNBC
news and interviews. The answer is yes, or rather CNBC can
help, but it takes some doing.
This analysis of CNBC tells how. I first posted it in misc.invest.stocks and this is an updated version.
I began with $80,000 to invest and a commitment to simply buy and sell stocks: no short selling, no buying on margin, no bonds, no commodities, no options, no futures, no tricks.
I seldom buy less than 200 shares and buy in blocks of 1000 when possible. The buy is for short-term and mid-term, short meaning a turnaround between an hour and 8 weeks, and mid a turnaround within 6 months.
Early-on came a chance to see what CNBC could do. TWA Flight 800 was knocked out of the sky. While national attention was focused on a bomb or a missile, CNBC told us about Invision Technologies, revealing INVN as the folks who made the only airline baggage scanner approved by the FAA.
How often does one come across a no-brainer gainer selling for 13? I grabbed it. It meandered back and forth between 19 and 34. A trader's dream. Work the cycles. You can do it despite NASDAQ prices showing up 15+ minutes late on the CNBC ticker. (The AMEX ticker is also 15+ minutes delayed. The NYSE ticker on the top line is NOT delayed.)
INVN provided recompense for watching TV. Since mid-1996 there have been at least a half-dozen similar stocks that caught fire after CNBC alerted viewers to them.
But there are traps, dangerous traps. USRobotics (now COMS) is an example. What a debacle. Wild swings up and down twice a day. After I recorded a 200 point movement over just a few weeks, I sent CNBC email pointing out the unusual USRX activity and asked what was behind it.
Timing is everything. That very night in after-market trading, someone offered a large block of USR stock way below the closing price. That got the attention of CNBC's Hibernian Hall crowd: Joe Kernen, the MIT-educated stock editor and medical science analyst; David Faber, the Wall Street reporter, and referee Mark Haines.
The next day USR was the lead assignment on CNBC. The oldest ongoing financial magazine in the country (Financial World) had reported just a month before that USR revenues should double this year and earnings more than double. So who's dumping USR below the market? Why?
Out of tight-lipped short sellers (occupational deformity?) came a report of a midwest mutual fund group sitting on a mountain of USR stock it didn't want. But no smoking gun.
CNBC's story sparked an article in the WSJ the next day. CNBC's reports were deeper and more informative. And first. But neither one discovered whose agenda called for sinking USR or why.
CNBC's great program for investors is Squawk Box every morning from 8 to 10. Part of what makes it great is host Mark Haines, a U of Pennsylvania law school graduate and member of the NJ bar who gave up law for TV. Squawk Box features a daily guest host from the street who is usually someone of impressive credentials.
Robert Solomon (my boyhood schoolmate) has proven to be the most accurate and thorough market analyst in these bullish times, but with one exception all the guest hosts have been on the mark, and some have been highly entertaining. Only Jimmy Rogers, the host every other Friday and a CNBC regular, has been consistently bearish and wrong, though always fun to hear.
While CNBC is a potent source of information, it's more profitable when used in conjunction with other input. It helps to read a lot of hard copy and surf cyberspace.
The ILink Int'l Netmail Network was where I discovered ASDL technology and two companies that produced excellent profits for me in 1996, Westell and Amati. WSTL I found at 24 1/2. After a CNBC story it rose to 44 in 5 weeks. AMTX didn't do quite that well but ran up even faster. They later dropped but by then I had sold.
I hate to say this (no he doesn't) but Usenet's misc.invest.stocks has the worst signal-to-noise ratio of any stock talk group I've run across. Couple of hundred messages a day and maybe 2% make you wiser. Pity.
Back to CNBC.
After 10 AM the programming is designed for a less sophisticated audience, and is filled with headline news and endless repetitions of the day's few leading stories. Not only repetitious, but back-to-back repetitions often with the same stories twice within 5 minutes. It's hell on an all-day viewer but the ticker is still there, and a silent ticker can be good company.
I prefer to talk of excellence like the Hibernian Hall crowd noted earlier of Kernen, Faber, and Squawk Box host Haines who give 110%, the extra 10% being what matters in the world: humor and congeniality. Some mornings their asides and interplay are hilarious.
And another trio of rock-solid CNBC pros:
Kathleen Hayes on the Byzantine credit beat who analyses the daily economic reports and puts them in perspective. She's the newest member of the team and is doing what she was academically trained for. She fights for the verities of the dismal science against guest bulls and bears who prefer their own slant. The result is a well-rounded picture for Squawk Box viewers.
Maria Bartiromo is usually assigned to the trading floor of the NYSE. On a busy day she has the hardest job on the staff, and is so cool she makes it look easy. A fine reporter of uncommon candor, and a delight to watch. She often looks like someone who didn't have to fake it the night before.
CNBC has one great reporter not on Squawk Box, the awesome Ron Insana. Ron hosts Inside Opinion from noon to 12:30 and Street Signs from 3 to 4. He seems to know everyone in the business and they know and respect Ron. He's outstanding in every way. Studying Ron is a post-doc clinic in financial journalism.
Ron is in his mid-30s and wears ... interesting clothes. He's influenced by Martin Scorsese films? Stripes with contrasting stripes is the rule.
For interviews with CEOs and other power players, Insana and Haines, an older pro, are the ones to watch. Mature, highly intelligent, incisive. CNBC interviews by these two can be striking. Insana combines a diplomat's tact with a terrier's demands. Haines has little patience with a guest who spews obvious crap, as some do.
Interviews are the fuel for CNBC and the octane level is astounding. When the French government had a bone to pick with US Congress poobahs, the ambassador himself was dispatched to CNBC, not an underling. The daily menu is a plate of CEOs, CFOs, fund manager stars, and the street's showcase analysts.
Not every interview is a trophy but not a day goes by without at least one that is, since Mark and Ron are seldom on vacation at the same time.
This is live TV and there can be hilarious surprises, like the morning the lovely Meyer Berman got into a shouting match with his favorite Satan, a SOES bandit. One of the great moments.
On a good day Wall Street is known for its nobility and its hot shots. Berman is the old school combination of personal integrity and wise market savvy, a mensch respected for bringing principled pragmatism into the money pits. He was a regular on Squawk Box where Mark saved the last minute for Berman's crazy poems. Haven't seen him lately, though.
Maybe CNBC doesn't weave the cloth of street lore as often as the daily and weekly writing press, but it happens. TV bosses aren't comfortable with local color but reporters are.
Helping CNBC to importance are two Bills, analysts Bill Wolman of Newsweek and former FDIC Chairman Bill Seidman. While their peers on the street and at the CNBC roundtable lose their head every time the plutocrats Greenspam, the two Bills never lose theirs.
Greenspam? My term for putting reverse spin on any good economic news in hope of pressuring Fed Chairman Alan Greenspan to raise interest rates. Other spin doctors are Louis Rukeyser's famous bond ghouls and any other traders whose first words from the cradle were "This can't last."
When the GOP gets back the Presidency and the economy goes to hell again the bulls will have their turn doctoring the news.
CNBC also features a profound guy at a desk far from the cameras, John Murphy. John's rare: a sane chartist.
Viewers can recognize CNBC's split personality. From dawn to 10, 12 to 12:30, 3 to 4 in the afternoon, and for brief intervals at other hours, the channel serves investors and professionals.
The rest of the time it's pitched to compete with daytime TV fare and sitcoms, before giving up and airing Geraldo bilge to pinheads.
As for CNBC being a Republican spear carrier in the political opera, who cares. Preaching to the choir. They covered the 1996 Democratic convention like a pro. They covered the GOP convention like a friend. And every night for 30 minutes Billory gets blasted. It's what you expect; CNBC is owned by General Electric.
Last CNBC character to note: Friday philosopher Jimmy Rogers. Jimmy's consistent, from his red bow tie to his conviction that a flight to quality means any investment leaving the country.
Curious guy. He circled the world on a BMW bike with a great babe (read his "Investment Biker") soaking up tons of info on foreign markets, then invested in some of the strangest. He made his money working for street legend George Soros. On his own, as a consistent bear in a bull market, will he turn his fortune into a smaller one?
Other musings ....
CNBC's finest hour: Mark Haines's 1996 interviews to assure we understood the SEC's findings in a NASDAQ investigation, and making the extra effort to let every viewer know where to download a copy of the SEC report and the more important addendum that's chock-a-block with smoking guns.
CNBC's un-finest hour: the day discredited newsletter maven Elaine Garzarelli said her market indicators pointed to a crash. Each staffer tried to out-do the others playing Paul Revere. Insana's house apologia the next day defended it as "reporting the news," ignoring the real issue which was the entire staff doing an imitation of Chicken Little.
Most spectacular advertising on CNBC: An International Paper spot promoting the Olympics that advanced the state of the art of morphing.
Worst ad: a product to dye your scalp, promising that no one will see your bald spots. Bought by shining lights who fall for Greenspams? Or the guys who buy "Dorf Goes Fishing," another advertiser CNBC should just say no to.
My favorite ad: Union Bank of Switzerland's tasteful reading of great poems extolling individualism, honesty, and personal accountability.
Pick of the crop: some lines from CNBC regulars and guests.
From the casino CEO who felt Las Vegas is for adults and shouldn't become a family resort: "A crap table isn't a place for changing diapers."
Joe Kernen, when a battered stock unexpectedly gained a point: "Is this a sign of life or a dead-cat bounce?"
Fund manager Mario Gabelli's term for probing a company to check its fundamentals and state of health: "stock proctology."
Most balsy liar: Michael Payne of the Int'l Olympic Committee declaring that honoring *only* VISA cards, an Olympics sponsor, was "in no way allowing a sponsor to dictate to the IOC." (The IOC is one of the most corrupt organizations around.)
Kernen again, when a stock plummeted three days in a row: "Who wants to catch a falling knife?"
Observation: company founders often look like Orville Redenbacher. CEOs hired by a board of directors tend to resemble Cliff Robertson. T and A for gents.
One of the most outstanding technical staffs in all of TV-land. That gang behind CNBC's glass wall is 2nd to none.
This is live TV, live like Saturday Night Live, but live all day long, not a mere 90 minutes a week. Quality? CBNC's tech crew flubs less in 6 months than SNL does every 90 minutes.
Most impressive is the seamless integration of the daily hundreds of film clips to ad-lib live audio. Try that at home for an idea how hard it is, or recall the errors you've seen on any major network's evening news where they have the enormous advantage of scripted audio, yet blunder anyway. CNBC techies face 1000 times the challenge and blunder far less often.
It boggles the mind. It probably boggles the liver also but you have to ask Joe Kernen about that.
CNBC tech directors have to be singled out for special mention. As a class tech directors are not known for brains. For example, in sports the color man is required to have an IQ neither higher nor lower than room temperature. Dumber job seekers get hired as tech directors working in the trailer out behind the stadium.
That's why we see so many shots of football and basketball coaches picking their noses, and so many shots of pinhead fans giving us the finger. Everyone aside from tech directors knows a basic truth. People attend a game to watch the game. They don't give a damn about the side show, and neither do viewers.
Sports tech directors follow a mindless rotational script. Not CNBC tech directors. They watch the action, respond to it, anticipate it.
When a stock chart is on someone's CRT we see the chart. We don't see a man watching the CRT. Obvious? To us it is but compare that with MSNBC's "The Site." Also live TV but those directors key the camera on the face of the person who put something on a CRT, not what he put there. We barely get to see the display before it switches back to the head shot.
Speaking of head shots, when AT&T announced that totally unknown candidate John Walter was picked to take over the company, within two minutes CNBC came up with file photo 440, head shot of John Walter. Good job.
They probably have a photo of Jeff Daumer in event he's named the next CEO at Sunbeam. Jeff's dead but they have it anyway, just in case.
Any of the foregoing opinions you agree with are shared by the author.
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