A Response to an Old Post

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By TMFOtter
January 30, 2006

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About a week ago a post came up on this board that I noted, but respond to because of trading restrictions. It is this one:

While this person may be long gone, there were enough people who recommended it that it pains me to think that there are people who believe that what was written here was actually true. The post is about my colleague, Seth Jayson, of whose work I am very proud. There is this interesting piling on of Seth here on this board, because people -- starting with Patrick Byrne -- think that he has a conflict of interest, that he is bought and paid for, or whatever.

Patrick Byrne is my friend, and so I will say here what I have also told him privately: I put my honor on the fact that Seth isn't on the take from anyone. Now, given that the person who wrote this post set me up as a counterexample to evil Seth, perhaps that has some currency. Or maybe it does not, and anything that does not fit within the "those who disagree with Pat's actions are shills for the shorts" model, and I'm leaving myself open to similar attack. If the good tidings are worth nothing, then they are not worth protecting.

So, onward into the breach.

One of the things that I find funny about these kinds of posts is the tendency by people to structure things as a string of facts, when in actuality they have no idea what they're talking about, or what the facts actually are. So, let's start with what was supposed to be a compliment toward me.

Seth thinks if keeps writing what Rocker et al. wants to read, maybe he'll get invited to speak at the Value Investing Congress with Herb Greenberg, just like Bill Mann did. What Seth doesn't understand though, is that Bill Mann was invited to speak because he still strives to be an honest journalist. Rocker et al. is still trying to buy Mr. Mann.

Focusing on this last line. In it I am held up as a relative paragon of morality. But this person is dealing in untruth. No one has ever, ever approached me offering me any remuneration of any sort for me to write an article one way or another about any company.

For whatever reason, this person set out as fact that David Rocker is trying to buy my services. It isn't. Neither, by the way, is there any link between the Value Investing Congress and David Rocker. Whitney Tilson, the co-founder of the Congress, used to work with me at the Fool, and invited me to speak. He also admires Herb's work, and invited him as well.

The author in fact has no idea of the circumstances of my invitation to speak at the conference.

For the record, I admire Herb's work as well, though my current status as a shareholder in Overstock and in NovaStar should suggest strongly that I do not always agree with him.

And I sure as hell am not a journalist, though that is an honorable profession.

I find this to be an interesting habit of the folks who believe there is a massive conspiracy: assigning or inventing facts to fit their preconceptions. It's one of the reasons why I think Bob O'Brien is at best a dangerous blowhard.

A story: in 2004 a freelancer named Craig Cunningham wrote an article on NovaStar that the Fool ran. I only saw it after it came up on the site. The article contained some things that I believed were not appropriate for a Fool article, including discussions on a short-squeeze, speculations about "tape painting," and a link to a NovaStar fan site that Bob O'Brien had set up.

I had seen this site and thought that it was grossly irresponsible. It was one of those "here are all the great things about this company, and anyone who mentions any risks is obviously conflicted." It even contains a credible discussion about taking equity out of your house to finance purchase of NovaStar stock. This was nothing that I believed that the Fool should be even tangentially connected to, and I said as such to the managing editor. Soon after, the article, re-edited, went back up on the site.

I was at the time, and still am, a NovaStar shareholder. On the NovaStar message board over at Yahoo, Bob O'Brien posted that obviously Rocker's short-selling cabal had gotten to the Fool, and wasn't it too bad that free speech wasn't free. This was just more evidence of the power of the forces arrainged to take down NovaStar.

It wasn't. It was just me and my belief that his site was irresponsible, and that we should have nothing to do with it. In the absence of information, he just made stuff up. The only person to whom I have ever disclosed this fact before now was the author of the story.

But enough about that. Let's go to the top of this particular post.

Seth thinks if he keeps parroting Jesse Eisinger of the WSJ Urinal and other captured journalists, he can leverage himself into a position the TheScam.con, and from there onto the Urinal, just like Jesse and Justin, or maybe over to CBS Marketwatch, like Herb.

It's interesting that the author is assuming that there is some pecking order among these organizations. I suppose I should be insulted. Instead, let me say this -- there has never, ever been a single Fool writer who has left to go to theStreet or Marketwatch. The overwhelming majority of financial analysts who left here have gone to mutual funds or to hedge funds. Bill Miller's shop is chock full with former Fools. There's this aspirational part, which is absurd, but then there is an additional sort of ladder set up.

Why should Seth answer any of Patrick's questions? Seth already knows what side he's on and he doesn't need to be confused with facts and evidence.

I wouldn't answer them either. The assumption with these questions is that Seth is some NSS-denier. I don't believe that he has ever claimed that naked short selling was a myth. What he said, from the outset, was that he did not believe this was a good use of Patrick's time, and that Patrick's behavior had convinced Seth that he no longer wished to be an Overstock shareholder.

To my mind these are exceedingly reasonable positions to take. But there's something else here. Remember, I'm the one who is being held up here as "the good journalist." But even that is wrong. We're not journalists, though that is an honorable profession. Our job isn't to report. It is, at all times, to say what we think, what our analyses tell us. We're analysts, eligible for the CFA, not journalists, eligible to join SABEW.

Of the companies that Seth Jayson has really gone after, there is only one that I do not believe is dirty to the bone, and that is Overstock. Taser, Stinger, GlobeTel, Law Enforcement Associates, PainCare, Marth Stewart OmniMedia. Rotten to the core, I believe. I've watched the guy comb through these companies' filings, and his level of research astounds me. But he's the bad guy.

Fine. I'm the good guy. And there are people at the following companies: Research Frontiers, Hemispherx Biopharma, Sirius, Internet Capital Group, Elan, General Motors and so on who believe that I am in the employ of short sellers, because I've written "obviously biased articles" about them. I'll bet that more than half of the things I've ever written have prompted some yahoo somewhere to say "the evil XYZ hating cabal paid you to write this." I've gotten threatening calls at home, death threats, been threatened with suits, SEC investigations, and other harassments. Think I'm the good one? Say that again when I write something bad about your company.

This is a patently ridiculous way to deal with people who have a different opinion, or a different analysis than you. And yet, there we are. It is easier to assume Seth is dirty than it is to say "this is a guy who is offended by what he sees in Byrne's behavior."

When it comes to the church, evidence doesn't matter, only dogma and rank.

And all of the foregoing is why this is such a funny comment. Evidence doesn't matter. Obviously, David Rocker's trying to buy Bill Mann, but evidence doesn't matter. Seth Jayson's been bought and paid for, it's obvious by what he writes, but evidence doesn't matter. They're trying to work their way up to, but evidence doesn't matter. The short selling cabal got the Motley Fool to change its story, but evidence doesn't matter.

Well, I say evidence damn well does matter, even if you'd like to run roughshod over what is actual evidence in fact and make statements out of whole cloth. You wish to believe Seth Jayson is on the take without so much as circumstantial evidence, then that is your right. But let's not dismiss that particular church dogma as being the providence of others without regarding our own house then, eh?

I find it funny that no one questioned any of these "facts," and yet there can be a long, drawn out conversation about whether Overstock is 100% overstocks.

(Doesn't anyone remember the diamond purchase? The build your own ring? Who has ever heard of overstocked build-your-own rings? With diamonds? Does anyone think that Worldstock is actually overstocked stuff?)

Back to my other stuff.
Bill Mann

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