Good as an info source; dont rely on its predictions though

First off, Id like to say I have read the other reviews, and I do agree with some of the positives the reviewers mentioned about Barron's. However, I think there is a fundamental flaw in the magazine that I have seen come up time and time again in my experience working in the financial publishing industry. Every week I specifically read Barron's and every week, out of personal curiosity, I also note the effects of some of the magazine's reporting and how it plays out in the market.

(I would like also to note that I do not work for a Barron's competitor - therefore this advice is unbiased.)

Barron's consistently serves up last week's news, and at times and places it does this fairly well. However, the magazine also goes into things we can call "stockpicking," "predicting," or "forecasting," as most of the other reviews have mentioned.

Barrons, via writers such as Lauren Rublin, often offers a weak "expose" on a certain company that does nothing more than drum up interest over one aspect of what is 99% of the time already-public information. The article will take a strong bullish or bearish stance on that company's stock based on the views of one or two analysts quoted in the story. When the issue comes out on Monday, that company's stock is often influenced by the article, either moving slightly up or slightly down.

Making decisions to either buy or sell a stock based on one of these articles is probably not one of the best moves a person can make. In fact, it is probably a bad move.

First off, the article is written by a writer, not an expert. That writer is a journalist, not an analyst. This journalist probably majored in English (or liberal arts) in college, got a masters in journalism, and picked up his/her financial and stock market knowledge somewhere along the way. The only credible opinions which can be found in the article come from the analysts he/she quotes. Plus, the journalist is working on a deadline, so how thorough do you think the research will be that goes into a story?

For an example of this, see the contraversial "Internet Stock Cash Burn Rate" article, which cited in another review here on eopinions. The article tried to predict how long certain internet companies would last based on the speed with which they were using up, or "burning" cash. The day that article was published, and for the week after it was, I personally saw about 30 press releases put out by companies letting the public know that Barron's left out major sources of funding when it made the calculation. That's right. Barron's overlooked millions of dollars worth of cash made from secondary public offerings and other financing, making its prediction virtually worthless.

Then you have the problem of limited viewpoints quoted in the article. Usually they will show you comments from 2 analysts who follow the company out of a possible 20-30, depending on the size of the company. Who is to say that they didnt call 10 analysts, get 10 differing opinions and then just print the ones that backed up their story?

On top of this, you have to look at the readership of Barron's. It is a fairly widely-read publication. If its printed in there and youre reading it, chances are you are too late to act on the advice you are given. Everyone already knows it already. Barron's comes out Sunday evenings, and people who need to know about articles in there read them well before the market open on Monday. The little guy gets no big advantage reading about a stock in that magazine.

I'll leave you with a quote pulled right from the July 10 edition of Barron's, where they admit their own ineptitude. Remember, this is just one out of many mistakes. They were just kind enough to note this one for us. Barron's doesn't apologize for all of its predictions, so watch it. Sure they may get lucky sometimes, but I wouldn't take Barron's word as gospel:

"It's time to admit we may have been too pessimistic on prospects for Intel. ...we figured the market a bit overly enthusiastic in pushing the stock to 75, then about 33 times expected 1999 earnings and double the targeted year 2000 growth pace. Noted Howard Anderson, president of the Yankee Group, at the time: 'Investors think Intel is bulletproof but it isn't.'
Since then, the company and the market proved us wrong, notably as the stock soared to a peak of 145 3/8 ..."

So, they said Intel was overvalued at $33 per share, then it soared to $145. I wouldn't call that sound advice, and though I know you cant always predict the market, Id just like to note that some people are much less qualified to make predictions than others are.

To sum it up, buy Barron's to get at the solid information. They offer some great news coverage and hit on everything from IPOs "Offerings in the Offering" section, to dividend news, to "What to look for next week."

Don't however, rely on Barron's hype and unsubstantiated feature stories. They are mainly there to make a good headline. In my opinion, you can save yourself the risk of reading these stories by just getting a subscription to "Business Week."


Hope this helped.