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Media spin continues

July 1, 1993

Media spin continues

By Joe Baker, Senior Editor

The willingness of American national media to distort the truth was clearly demonstrated recently by two articles dealing with the economy. One was an American report, the other a British article.

The product of the U.S. press, put out by CNN/Money, was headlined “Buffett Bullish On Stocks.” The London Times article carried a headline reading: “Buffett Expects Markets to Get Worse.”

British reporters quoted Buffett as saying: “We’re in a long correction because we had an incredible ‘mass hallucination,’ ‘bubble,’ whatever you want to call it. That carries a price with it, which has not been fully paid. You get these periods when markets disconnect from the real world. We had a situation where the markets became totally disconnected from business reality. This was a pretty extreme case, but they get back in sync after a while. If you own equities for 25 or 30 years, you will get a result that parallels that of business.”

Comstock Partners, Inc., an investment house that noted the two reports, said the American article completely misunderstood and distorted Buffett’s meaning.

The U.S. piece said Buffett is bullish on U.S. stocks and that stock markets are “way out of sync with the economy.” A careful reading of the article though, shows Buffett’s bullishness is very long term, 25 to 30 years as the British report stated.

Buffett said: “I’m a bull on America over time. If the economy does well over a long period, markets do well over a long period. In the short run the market’s a voting machine and some times people vote very unintelligently. In the long run it’s a weighing machine.”

Comstock said the references to unintelligent voting and an out of sync market related to the late 1990s and not to today’s market. The company said U.S. media seem unable or unwilling to report anything negative about the markets or the economy.

At the moment they are claiming the economy is recovering, that stocks are undervalued and that Buffett is bullish. Of course the reality is exactly the opposite. If there is any recovery it is weak and fading; the market is way overvalued and Buffett is far from bullish.

That approach is not confined to economic reporting in this country.

As the late Walter Lippmann once said: “Truth and the news are not the same thing.”

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