Journalists who don't believe what they write

You risk seeing stars if you tell astrologers they cannot be serious about the prediction game. Likewise, racing tipsters.

But you can now confidently deride financial journalists who play at futurology. The Sunday Times has concluded that "a bit of fun" is how most regard the annual death or glory share-tipping ritual.

Readers seemed not to see the funny side of it, having "followed our tips and lost their shirts". The paper’s 2000 portfolio dropped almost a quarter in value. One share fell 86 per cent. The 2001 portfolio did better, though showing an overall return of barely 3 per cent, and that thanks to one share rocketing while most of the other nine fell. Rivals fared even worse. The Times was down 32.8 per cent, The Independent down 40.9 per cent.

Disturbed by punters’ criticism, The Sunday Times embarked upon (and, commendably, published) a candid appraisal: The Truth About Newspaper Share Tipsters.

That truth is that many financial journalists have little interest in share price movements and even less understanding of how to value companies. So share tipping is "essentially ad hoc". Heaven help us, ideas come from sources with their own agendas, and articles in trade magazines.

The paper set out to remind readers of the potential pitfalls – and "to encourage them not to believe everything they read in papers."

Indeed, why should they when journalists do not believe everything they write in the papers?

David Parsley, business editor of the Sunday Express, concedes that tipping "is not our job and we’re not very good at it". Jeremy Warner, City editor of The Independent, regards as crazy punters who buy tipped shares without doing a lot of research. And Nils Pratley, former editor of Sunday Business, says nobody in his right mind would buy a share on 1 January intending to sell on 31 December.

But still the barmy business of the annual tipping spree goes on. Every pro knows that the simple fact of a share being tipped means the Stock Exchange immediately marks its price up, though for how long is anyone’s guess. And what happens next remains a gamble even for insiders with all the numbers on their screen.

The Sunday Times quotes a rival business editor who wished to remain nameless: "If we were any good at tipping, we wouldn’t be doing this job."

Nobody’s arguing.

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