Tuesday, September 10, 2013

Still more Motley Foolishness

In the pursuit of a couple of threads about the business of media, I find myself frequently clicking on links to Motley Fool posts and almost always regretting it. Here's how I summed up my reaction earlier:
MF specializes in overexcited, often under-informed posts usually focusing on hot topics that have strong emotional associations of success or (more rarely) failure. All of which is designed to get readers anxious and eager enough to shell out $199 a piece for various newsletters.
One part of that formula is the BIG HEADLINE!/small story. The pattern here is to start with a wildly overstated headline then scale back to a much more modest actual claim in the article. On top of that, even the modest claim is weakly supported only by very optimistic arguments.

Recent examples:

This Marvel Movie Has "Winner" Written All Over It
(about the upcoming Guardians of the Galaxy)


Why Disney's "Agents of S.H.I.E.L.D." Could Be Bigger Than "The Avengers"

If you read the first, you go from Guardians having winner written all over it to it being "an interesting mix of characters that under the guidance of director James Gunn could result in a potent Marvel movie." In this context, I'd read "winner" to be above average for a film in the larger Avengers franchise or at least a 300 million dollar box office. From there we go the the more modest and far more vague 'potent.'

Left out is the fact that the director, while promising, has only directed two features, Slither and Super, neither of which appear to have broken even. Add to that the fact that introducing large numbers of unfamiliar characters is problematic, and that one of these characters is named Rocket Raccoon (a joke that wasn't good even when the reference was fresh).

Likewise, after claiming that the new Shield television show could be bigger than the Avengers, the article never actually argues for anything more than it possibly being a successful show that's good for the network. Once again, even that fairly limited claim is not well supported. No reason is given why the show should be more successful than something like Young Indiana Jones (another TV spin-off of a hit franchise) or that, if it is successful, that success will be somehow more important to ABC than the success of a Castle or a Dancing with the Stars. It should also be noted that while Joss Whedon has been the creative force behind many critically acclaimed TV show, he has never, to my knowledge, been involved with an actual hit. (And no, having a long run on the CW does not count).

Just to be clear, I have every reason to believe that these shows will be entertaining and have a reasonable shot at success. The people at Marvel have a good track record and have shown themselves to be smart about playing a long game.

What I am saying is that Motley Fool has not presented any arguments to show one way or another that these projects will be successful enough to move the stock. What MF is doing is trying to create a emotional state such that you will be eager to start playing the market and you will subscribe to one or more of their newsletters. As far as I've been able to tell, that's pretty much all they try to do.

I have two problems with that approach. First, they appear to be selling a product of little value. Second, and this is the kicker, they are encouraging people to engage in what is for most of us a highly risky behavior.

I have no way of knowing whether or not Guardians of the Galaxy will break box office records or if Agents of S.H.I.E.L.D will be the top rated show next year. If they are hits, I couldn't tell you whether or not that success has already been anticipated by the market and priced in to the stock. These analysts might be right about Disney stock or they might be wrong. Given the arguments we've seen so far I have no reason to guess one way or the other. However, given the cost and risk involved, I would be reluctant to make an investment based on one of these guys' monthly newsletters.

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