Warren Buffett famously declares in his Berkshire Hathaway annual reports that he is a lucky man to have grown up in a country that uniquely appreciates his talent for asset allocation. In what other country could a man with a voracious appetite for business news passively invest in self discovered opportunities to grow from nothing to one of the world’s great fortunes? While Warren is our best practitioner it can be said that as a country the United States does a better job of asset allocation than any other and one reason for this great result is our First Amendment right to a free press.
Public corporations issue annual reports to their stockholders the world over. These reports are to the business owners where management discusses the company’s position, direction and finances. Berkshire Hathaway’s annual report is an excellent model because Buffett covers issues in a manner that he, as a great asset allocator, finds important to know and understand when examining other companies. Never the less, without a free press Buffett’s letter and report would be just his word; the equivalent of Bernie Madoff asking you to trust his financial prowess. Our tradition of a free press tests these stockholder reports. We trust Warren because a free press has verified his character and results over a long period of time.
It was reported “The chairman of Bloomberg L.P. said in a speech here on Thursday that the company should have reconsidered articles that deviated from its core of coverage of business news, because they jeopardized the huge sales potential for its products in the Chinese market.” This is a rather clueless as to what you are about statement coming from the head of a publishing empire whose business is to report on business. Those screens on their ubiquitous terminals are an amalgamation of business reports! What business would Bloomberg have if it got out that they were a house organ of the Chinese government? It appears as if Bloomberg’s Chairman, Peter T Grauer, is speaking as if he were the publisher of a local paper who didn’t want to offend advertisers. But he isn’t. Business is global and good business information is more valuable to his customers than appeasing easily offended crony capitalists.
Apparently the offense that caused the drop in the placement of Bloomberg terminals in government offices was an article regarding China’s current leader, Xi Jinping, and his millionaire family members. Sure it’s an embarrassment that any Authoritarian would try to quash but, and unfortunately for Chairman Grauer’s effort to appease, it is difficult to consider the article as anything other than business news! An allocator of assets, such as Warren Buffett, would like to understand the crony environment of a country where he is considering making an investment. On the other hand, if China’s government was insulted enough to have Bloomberg thrown out of the country then their massive portfolio of foreign funds would presumably suffer from poor investment decisions made by those working from second rate data on terminals toeing the party line.
Businesses and governments can delude than themselves that they are doing a public good and a free press can correct those that have jumped the track. Bloomberg by holding firm in reporting all the business news makes it more valuable to it’s consumers. The fact that Xi Jinping is ticked off is irrelevant, he isn’t the customer. On the hand Bloomberg does China a favor by factual and investigative reporting. Now that the low hanging fruit of economic progress has been consumed, China needs a free press more than ever if it is to keep fraudsters and swindlers from misallocating resources into schemes that slow and even kill future prospects. Bloomberg’s Chairman on the other hand has to fight from reducing their information to the lowest common denominator. Common is cheap; something not usually associated with Bloomberg.
No comments:
Post a Comment