Stripping Out Noise
When you want information - you need to strip out any extraneous noise.
The market is constantly trying to price the health of different stocks. The market makes it’s judgments based on all the information it receives. Information is news but is news also information? I don’t think so. For me, information is only important if it tells me how healthy a company really is. If news does not tell me that, it is noise. I strip out noise from information before I make decisions.
A lot of noise comes from PR departments. They are propaganda machines. Here is a list of recent press releases for ProLogis (from Etrade):
How many of these are important? For me, not much.
- The date and time for the earnings conference call is important to me.
- Leasing and development activity is important but unless it gives me the dealpoints, it’s pretty useless because I know it comes from a biased source.
- The last headline regarding Fitch’s debt ratings is moderately important because a lowering in the debt rating directly affects the common stock. However, NOT lowering the debt rating does not necessarily NOT affect the common stock because it is last in line. Further, the ratings companies are obviously incompetent in this market so I can’t read too much into the “no change”. Finally, common sense tells me that if a borrower makes less $, debt is more risky, so these ratings don’t mean shit.
- Everything else, taken alone, is useless. (Congrats to Schwartz on Trusteeship - that’s cool for him) However, when taken together, it is valuable information. When a company feels the need to announce very little ribbon and award that is, at best, tangential to financial health, I ask: Why? This is a tell. I know it. It is noisy like a bunch of kids banging on pot and pans for attention. It is an attempt to distract. It is smoke and mirrors. It is sleight of hand.
If PR departments gave out real information. This STORY regarding the bankruptcy of Leiner Health Products, a ProLogis tenant, would be listed as a headline on Yahoo. By the way, Leiner assets were purchased by NBTY Inc. Here is a line from the article:
“Carl Hymans, an NBTY spokesman, told the Charlotte Business Journal in an e-mail that NBTY will not reopen the 600,000-square-foot Fort Mill operation.”