Buffett on “terrible journalism”

Warren Buffett — owner of one newspaper and director of another — complains in his letter to shareholders (PDF) about his quote being mangled and misused by sound-bite journalism:

Last year we saw, in one instance, how sound-bite reporting can go wrong. Among the 12,830 words in the annual letter was this sentence: “We are certain, for example, that the economy will be in shambles throughout 2009 – and probably well beyond – but that conclusion does not tell us whether the market will rise or fall.” Many news organizations reported – indeed, blared – the first part of the sentence while making no mention whatsoever of its ending. I regard this as terrible journalism: Misinformed readers or viewers may well have thought that Charlie and I were forecasting bad things for the stock market, though we had not only in that sentence, but also elsewhere, made it clear we weren’t predicting the market at all. Any investors who were misled by the sensationalists paid a big price: The Dow closed the day of the letter at 7,063 and finished the year at 10,428.

Given a few experiences we’ve had like that, you can understand why I prefer that our communications with you remain as direct and unabridged as possible.

  • Anthony UK

    In another field, theatre producers have made an industry out of selective and partial quotations. “A superbly gripping, genuinely uplifting prison drama” said the board outside the Shawshank Redemption recently in London. However, the reviewer was referring to the film and not the play which he goes on to say he loathed!!

  • Kaiser Jaeger

    News/TV can twist things so that they can become absolutely false; if a 180 is told as a 360 who can trust TV?

  • http://hbilling.personal.asu.edu/wordpress/ Heather

    It’s not just broadcast media, either. They’re the ones who get crucified for it, but I’ve watched print reporters pick and choose which parts of quotes they’re going to use, too. I think this is one area where technology actually makes it harder to cheat: It’s a lot easier to do a quote mashup with printed words than it is with audio and video.

  • Nic Fulton

    He’s being disingenuous. The second part of the sentence didn’t state anything – i.e. he didn’t say “the stock market will rise” he basically hedged that it could do anything. He claims that because the economy rose by the end of the year he was being misquoted – hold on? He didn’t say it was going to rise. If the market had fallen then his overall statement would have been no more or less accurate? Would he have claimed he was misquoted? I don’t see there’s any misquote here. He said it was in shambles, that was reported, making the connection of economy in shambles to market falling is up to the reader.

    • http://www.twitter.com/ppatel Pratik Patel

      To Nic Fulton. Actually the second part of his assertion did not deal with the economy but the market. The two are not mutually exclusive. As he goes on the point out in the above quoated letter, the market itself went up. The economy being in shambles does not often mean that the market will generally be in as much shambles. Buffet’s rant against the media is quite valid. The media made the same blunder that investers might have done by reading the extracted quote and not without hte contextualizing clarification. And that is his basic point. That second part of his sentence was essential.

      • Nic Fulton

        Pratik, yes you’re right I should have said “because the MARKET rose by…” If the market had dropped would he have claimed he was misquoted? I think not, and hence he’s being disingenuous.

        BTW – if you invest based on what you read in the media you’re not going to do great – unless you analyse the data independently. The media reports what has happened. Giving investment advice is not permitted – that you have to figure out yourself or consult someone legally allowed to disperse investment advice.

        The second part of his sentence said “but I don’t know what this means for investors”. Buffett is also not allowed to give investment advice, I suspect his lawyer made him put that bit in.

      • cm

        “BTW – if you invest based on what you read in the media you’re not going to do great – unless you analyse the data independently.”

        You can by analysing the nonsense out there and second-guessing what dopey traders will do.

        Perception is often more important than reality, and sometimes there’s a double derivative: the perception of the perception is sometimes more important than the perception or the reality.

  • Jill Faulkner-Bogdan

    This situation seems to be indicative of the competition factor that internet news has created. The quest for true and honest reporting has been diminished by the need for journalists to be heard, over the thousands of others that were once voice less. Of course, it’s not right, but in this age I think that this kind of journalism will flourish because being heard but being false will get you farther than being honest to deaf ears. It’s not right, but it’s a reality in the changing journalism environment.

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    He’s being disingenuous. The second part of the sentence didn’t state anything – i.e. he didn’t say “the stock market will rise” he basically hedged that it could do anything. He claims that because the economy rose by the end of the year he was being misquoted – hold on? He didn’t say it was going to rise

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  • http://www.atyourservicecaters.com/ Priscilla Granger

    It’s like every bad or degrading moment anyone’s ever had in journalism