Selective Disclosure? Who Cares? *You* Should!

Investors Win New Access
"SEC adopts full disclosure rule giving individuals the right to the same data as analysts"

Sounds pretty boring, doesn't it? Everybody missed this story. Not a single Mac News Web site thinks this is important enough to cover. We'll tell you why they screwed it up.

Have you ever wondered how analysts, historically clueless about what makes Apple viable, always seem, at least in the quarters that Steve Jobs has had a hand in, to come awfully close to Apple's numbers (earnings per share and the like)?

There is a couple of cents variation here and there but for guys who have shown they haven't a clue (note the CIBC Oppenheimer "analyst" who rated Apple a sell from its low of $13/share all the way through $98/share!) they are remarkable prescient when it comes to the final numbers for each quarter. Either these guys have amazing crystal balls or.....

Apple has been telling them what the numbers will be!

Had you ever heard of Merrill Lynch analyst Steve Fortuna before last February? Probably not. He burst on to the Mac scene with his report (BTW, check out the first line: "A Merrill Lynch & Co. report, obtained by MacNN." "Obtained" makes MacNN sound so important, doesn't it? Fact is, Pam Snook at Merrill Lynch was mailing the PDF out to whoever asked for it!) of "detailed insight into the future plans of Apple Computer executives." Nowhere in the report is it said that Apple gave this info to Fortuna.

Because these guys know in advance what the numbers will be (and the numbers have been good), Apple has kept the analysts fat, happy and looking good. Well, Regulation FD is going to change that, to Apple's detriment.

If analysts have to go back to working for a living when it comes to Apple, and if they have, historically, misunderstood Apple and its place in the computer culture, what do you think will be their call come this October?

Sure, they'll get a couple quarters right but overall, these guys can't find their butts with flashlights and a road map when it comes to Apple. Anyone want to take any wagers on how wrong their numbers will be one year from now?

And, while we'll all have a good laugh at their expense, what do you think their lousy calls on Apple will do to the stock price? Apple is a very "news fickle" stock. It doesn't take much to push it up or down.

Note the reports that came out in late June/early July (which analysts knew about back in May, BTW, because Apple told them about it) that iMac sales were lower than expected. Well, we Mac users fully expected that.

After all, the iMac line hadn't seen new product in months and we guessed that new iMacs would be showing up at Macworld Expo NY. No big deal, no panic, right? Not to Mac users.

But to people who don't follow Apple, that news prompted several web sites (including ZDNet, who really should know better) to paint a doom and gloom picture of colored computers in general and the iMac in particular.

What do you think happened to Apple stock? It stayed (relatively) stable!

Why? Because analysts had been told by Apple a month beforehand this was no big deal. Now, project the same events a year into the future. Same analysts, same news *except* they don't have prior knowledge.

How fast do you think these guys will pull their favorable ratings of Apple stock? And how fast do you think others will jump on the bandwagon? How fast do you think CNET will post their "Apple Stumbles" stories?

Granted, CNET is getting lots of good ink in the last couple of days with a favorable review of the Snow iMac. But has any Mac News Site pointed out that the author of the review, Gene Steinberg, is rather biased? Steinberg is the principal of The Mac Night Owl and writes a Mac column for The Arizona Republic Web Site.

And while it's true that seeing good Mac news on CNET is preferable to seeing bad Mac news, wouldn't it be better to see unbiased, honest, truthful, factual stuff?

We're not saying that Steinberg is anything but unbiased, honest, truthful and factual but it doesn't make him or CNET look very good when his background isn't there for everyone to see. And it makes it tough to take other web sites seriously when they don't point this little fact out themselves. But that's the old "lazy journalism" drum we keep beating to death over here.

Check this web site out. It's a transcript of an "interview," and we use that term loosely, with Steve Jobs on CNBC. Can you believe the inane and vacuous questions asked? Why even bother with the interview?

Keep in mind, this is going to get *worse* once Regulation FD becomes policy at the SEC. It's *not* going to be pretty.

PS: At the top of this column, we said no Mac News Site covered this story. We were right. But one of the Cannons points out that the MDJ nailed it. Congratulations!

Until next time, Loose Cannons Out!

cannons@applelinks.com

January 08, 2009