Why Soundbite Friday is Fun

The news, don’t you just love it? Not the local news stuff where it’s reported a person unexpectedly died, which is no fun to hear over family dinner, but rather business news.

Our editor eats, sleeps, and breathes business news, earnings reports, Eurozone lunacy, calls with management teams (oh yeah, we do talk with them), and whatever else may present itself during a 24-hour period.

One observation we have made in our late night decoding sessions is that there is a wave of interest in catchy titles that lure the reader into a usually catchy story. Hey, we understand, it’s all about “eyeballs” and measuring site traffic.

But, when it comes to business news, it’s our sense that while cool stories are being told to people worldwide, there is a badly missing education component. We aren’t suggesting back to high school classroom stuff, but helpful (or decoded) nuggets built into the story that facilitates the learning process.

If this were the case, the reader could consume the content, it mentally sticks, and he/she has a better chance of understanding similar stories in the future (and profiting off them if an investor).

Here are a few examples accompanied by some basic decoding.

Title: The Kindle Fire is the Fruitcake of Tablets
What was said: “Amazon tablet share fell to just over 4% in 1Q vs. 16.8% in 4Q. That's quite a big market share collapse!”

• Decoding the theme: “Market share”, mechanically broken down, is the amount of sales of a company’s product as a percentage of total industry sales of similar products. Should a company lose market share with its important product, in this example the Amazon Kindle, a company’s future profits could be wrecked as costs tend to not come down as quickly as sales. Bad news for the stock, today (the stock price will move, or “price in”, the soft profit outlook well in advance).

• Decoding the jargon: “1Q” and “4Q” are Wall Street abbreviations for the first quarter and fourth quarter, respectively. No way most moms managing their family’s 401k knew that.

Title: Michael Lewis: After the Financial Crisis
What was said: “When you look at the players at the center of the crisis, the enablers that packaged products and made them ever more complicated...were they crooks or were they fools?”

• Decoding the theme: That would be financial crisis, and it lasted from 2008 arguably until the stock market bottomed in March 2009. The enablers of the crisis, just to name a few of the buzzier ones, were Lehman Brothers, AIG, Goldman Sachs, Morgan Stanley, Bank of America, Countrywide Financial, JP Morgan, and basically every publicly traded financial institution.

• Decoding the jargon: “Packaged products” were housing related investments marketed as the best thing since sliced bread to people all over the globe.

Title: Spanish Borrowing Costs Jump Sharply at Bond Sale
What was said: “Spain's borrowing costs are set to rise by more than a percentage point at an auction of three-and five-year bonds on Thursday, with markets watching for signs that its troubled banks are losing their appetite for the country's debt.”

• Decoding the jargon: “Kept their appetite” is another way of saying investors are investing in Spanish and French debt despite being fully cognizant of Europe’s financial troubles. “Appetite” suggests a seeing of a money-making opportunity, perhaps on the belief the financial crisis in Europe is nearing calmer waters.

It was the learning of the littlest of details as children that makes us who we are today. Unfortunately, somewhere between college graduation and 20 years in the real world, we lose focus on having to continue to learn to stay sharp and relevant in ever changing fields of employment. As we have shared, learning about investing and the stock market could be done in soundbites that are to the point and could be mental returned to at a later date (because they are not filled with industry jargon, they are pure).