Wal
-Mart's foul-mouthed hypocrisy
Just add this to the list of image problems that Wal-Mart (NYSE:WMT) should assign to its political operatives. Last night, while I was forking my TV dinner, a non-threatening young man appeared on my boob tube in his clean, blue Wal-Mart smock and encouraged me to rush on in to buy my copies of Deadwood, The Sopranos, and, if I recall correctly, Oz, at my local Wal-Mart.
For the record, I've got absolutely nothing against these shows. I enjoy them, though I rarely see them. But I couldn't help but notice the foul-mouthed hypocrisy this ad promotes. The Sopranos is well-known for its coarse language and violence, as is Deadwood. In fact, Deadwood takes its cursing so seriously that it has spawned articles on its authentic, old-West profanity.
But step on into the music section of Wal-Mart, and what will you find? Over there, the same language is banned. If the company cannot get cleaned-up versions that meet its standards, it will not sell recordings that carry the Parental Advisory Label. I give Wal-Mart credit for being up-front about this. The policy is clearly explained on its website, and the edited recordings are clearly labeled as such. But it's silly to censor 50-Cent -- even if he and his record company agree to it -- in the music aisle, while allowing Wild Bill (and soon enough, 50-Cent himself, on DVD) to say whatever they want in the video aisle.
Is this a big deal for consumers? Not particularly. We can get our uncut version with a few clicks at Amazon.com. Is it a big deal for investors? Probably not. Unless it's a symptom of an underlying dysfunction. And there's other evidence that suggests to me that it is. Remember the recent flap in which Wal-Mart compared supporters of an anti-Wal-Mart ballot initiative to Nazi book burners? For all its recent efforts and expenditures aimed at better managing its image, does Wal-Mart really know what it's doing on the PR front?
Real risk on Wall Street
I've spent a lot of time this week dissecting the latest news on the NAND flash front, especially the fallout from Apple's (NASDAQ:AAPL) announcement that it was putting billions of dollars down to pay a slew of suppliers -- including one that doesn't yet exist -- for flash memory. You heard that right, it paid Intel (NASDAQ:INTC) and MicronTechnology a cool half-billion to kick-start a joint venture.
I tried to take a look at the real risks to SanDisk (NASDAQ:SNDK) -- and there are some -- but in the end I judged them to be not too great, especially in light of the potential expansion of the flash market, which is already undersupplied. This happens to be a view shared by a few Wall Street analysts. (Hey, it happens.)
But I was particularly struck by one comment, the kind of typical Wall Street idiocy that's so nonsensical, yet so pervasive, that we really must shine the light of logic on it whenever we get the chance. Briefly put, this comment urged investors to be cautious about SanDisk stock because of "headline risk." By that, Wall Street means the prospect that the media's coverage of a situation will cause investors to leave a stock, sending its price down.
Risk? Wrong. When a stock drops for reasons that have nothing to do with the value of the business, it is a gift. It's the kind of thing real investors -- who judge their results by a measuring stick longer than the next few weeks -- dream about. J&J (NYSE:JNJ) after the Tylenol scare. Coke (NYSE:KO) after New Coke? Select Comfort (NASDAQ:SCSS) after the pathetic, small-town muckraker mold scare?
But recognizing potential value has always required going against the flow, and there's a lot of money on Wall Street that is only comfortable following the flavor of the day. That's fine for them, but I wouldn't suggest you play that game. As a very small market mammal, your prime -- perhaps your only -- advantages over the big dinosaurs are the ability and the guts to zig when they zag.
And as a final bit of irony, the analyst making this comment still ranks SanDisk as some kind of buy -- whatever "accumulate" means. As for me, I second that view, but sign me up for all the "headline risk" I can get.
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Seth Jayson is a proud small market mammal. At the time of publication, he had shares of SanDisk and covered calls, but no position in any other company mentioned. View his stock holdings and Fool profile here . Fool disclosure rules are here.

