I was going to let the Motley Fool thread drop. They kept coming out with analyses and advice that I was tempted to comment on but I was afraid the comments would start to sound the same.
Recently, though, I saw a headline I couldn't resist clicking on. As a result, I found a whole new reason to worry about people basing investment decisions on MF recommendations. [still more have showed up since I wrote this. I'm afraid we have another thread coming.]
Just to review, when ABC announced S.H.I.E.L.D., expectations were high. The Avengers had been one of the most successful movies ever and, based on the box office of the first semi-sequel, Iron Man 3, interest was showing no sign of fading. Nowhere were these expectations higher than at Motley Fool which came out with a list of reasons why S.H.I.E.L.D might actually turn out to be bigger for Disney than the Avengers had been.
I pointed out at the time that this would have required a huge, historic hit and that none of the reasons listed in the MF post came close to supporting the claim.
Time passed and ratings rolled in. S.H.I.E.L.D had very respectable ratings, but they fell somewhat short of expectations. More worrisome has been the trend: ratings have been slowly but steadily dropping since the debut.
Now Steve Symington, the MF contributor who provided the previously mentioned post, has posted a response to the news and it unintentionally captures a lot of what bothers me about Motley Fool, starting with the title:
"Skeptics keep panning Marvel's 'Agents of S.H.I.E.L.D.' for its seemingly lackluster overall ratings, but here are several reasons Disney couldn't be happier."
First of all, to get the obvious out of the way, Disney could and would be a lot happier with better numbers. For this show to live up to anywhere near its potential as a tentpole, It would half to be both a bigger and a demographically broader hit and it would need to generate lots of real time view. There is no real tentpole effect for viewers watching on Hulu and delayed viewing greatly undercuts social media buzz on places like Twitter which thrives on the shared experience of simultaneous viewing.
None of this is disastrous. The numbers for the show are certainly not bad. On top of that, keeping the show around helps strengthen the relationship with Joss Whedon who has proven to be a very valuable asset to the franchise. Still, there's no way to get around the fact that, while there are bright spots, there is no major area where the show is exceeding expectations and there are a number of areas where it is falling significantly short.
Put another way, one of Disney's assets turned out to be worth less than was anticipated. There are various ways for investment councilors to handle situations where predictions prove directionally wrong. They can reassess their advice. They can argue that the adjustment is fairly small relative to the size of the company (difficult once you're on record as saying the asset could be bigger than the Avengers, but certainly valid in this case). What you never want to see is a councilor looking for reasons to justify previous positions. This is a natural response to cognitive dissonance but it's deadly for stock pickers.
The MF piece is filled with attempts at self-reassurance. Bright spots are trotted out without addressing the possibility that the market had already priced in anticipated numbers that were as good and usually better than what we've seen. Desperately upbeat language is used ("incredible staying power," "run up the score") while a negative but accurate statement like "continue to fall" prompts scare quotes.
Perhaps the most telling though, is what's not in the post. If you take a look at this post from TV by the Numbers after reading the Motley Fool piece, you'll notice a couple of interesting points. The arguments and wording are remarkably similar but one phrase that appears in the second post is nowhere to be found in the MF article:
"via press release:"