MacDonald of Fox Business covers the market’s swings
Elizabeth MacDonald joined Fox Business Network as stocks editor in September 2007, so she has spent the past few weeks covering the markets dramatic ups and downs.
The Dow Jones Industrial Average closed down 1.1 percent on Wednesday, its fifth consecutive day of losses after reaching near-record highs earlier this month.
Prior to joining Fox Business, MacDonald was a senior editor at Forbes magazine, where she covered stock market and earnings news and created “The World’s 100 Most Powerful Women” annual list.
Before Forbes, MacDonald covered stock market, earnings and accounting abuses for The Wall Street Journal’s Money & Investing section, with front page stories and “Heard on the Street” columns. MacDonald was one of the first journalists in the country to sound the alarm about the coming wave of accounting scandals in the mid-90s, and also broke stories on Scientology’s secret settlement with the IRS and the Kennedys’ use of the IRS to target political enemies.
Prior to that, MacDonald was a financial editor for Worth magazine and covered the IRS and taxes for Money magazine. MacDonald reported an award-winning investigative series on IRS abuses that led to improved taxpayer rights and reforms at the agency.
MacDonald has received 14 awards, including the Gerald Loeb Award for Distinguished Business Journalism (and won a nomination in an ensuing year); the Society of Professional Journalists’ Award for Outstanding Public Service reporting; and the Newswomen’s Club of New York Front Page Award for Excellence in Investigative Journalism.
MacDonald, who is also the author of “Skirting Heresy: The Life and Times of Margery Kempe” (Franciscan Media, June 2014), spoke by email Wednesday with Talking Biz News about covering the stock market. What follows is an edited transcript.
How did you first get interested in covering the stock market?
I’ve always wanted to be a reporter since I was little, 10 years old. I used to write notes on all sorts of things to myself all the time, like napkins, the back of matchbook covers, receipts. My parents who I adore, had eight children, my dad worked hard, but we didn’t have a lot of money. I’ve been working since the age of 15, and in high school worked in a bank, doing mortgage accounting and being a teller, which helped finance my college tuition costs. So I’ve been around business for a very long time.
How did you learn the best ways to cover the stock market?
In high school I was enamored with I.F. Stone’s work. Stone always told journalists to never cover press conferences and instead go back to the office and dig into documents. So that helped, given I took backwater beats at the Wall Street Journal and Forbes no one else wanted, but that I, in my nerdiness, thought were interesting, like the IRS or corporate accounting.
I like the footnotes, I live in footnotes, all sorts of action gets submarined in footnotes. If you don’t agree, just read the footnotes to Ken Starr’s report on the Monica Lewinsky scandal. I’ve been jokingly credited with creating one of the only work stoppages at the Wall Street Journal that a union would clamor for, because I had everyone reading those footnotes.
How can you make stock market coverage unique each day?
I try to deliver to viewers business news in an understandable fashion. Plus cut through the useless nonsense. When I watch the delightful bit of throat clearing from some experts on camera, I am often mindful of what the British dramatist Dennis Potter once said: “The trouble with words is, you never know whose mouth they’ve been in.”
But you know, we all quote our moms at some point, I remember she joked once when I asked her why she was talking to herself, and she answered that she, quote, “likes to talk to smart people.” My mom and my grandmother taught me to have courage, to be brave in my thinking. That we are what we repeatedly do, that excellence then is not an act, but is a habit. So I try to have a sense of vision, a sense of duty and service in what I do. “Not by words, but by example,” is a line I like too. I have a strong sense of duty to the viewer and the reader. All of that I try to make my habit.
What’s the hardest thing about covering the stock market?
Worrying that the viewer isn’t getting the right information or the right perspective, or is being misled by some hysterical rumor mongering by other analysts. Every day I oversee the Business Center desk on Maria Bartiromo’s “Opening Bell” show. We’ve delivered major scoops on GM’s massive car recalls, the bubbles in stocks like GoPro or the Ebola stocks, or the cyber hacks into JPMorgan, eTrade, Fidelity, Boeing, Lockheed Martin, Home Depot, and Target.
Every day we are in constant contact on the phone, with Wall Street trading floors, federal government agencies, law enforcement like the FBI, and research shops. My job is to give context and perspective, why viewers should or should not care or be worried. I want to elevate the conversation. I want to be the go to source for smart analysis on the big stories and market action.
With the stock market fluctuating so wildly in recent weeks, how can a journalist explain to a consumer what is going on so that they can understand?
I like to break news, dispel myths and expose big subjects and players. I really like George Orwell’s war reporting, I admire his refreshing, bracing honesty, his “Politics and the English Language” is a must-read for all journalists, for the simple rules of unambiguous, clear writing. I like clarity, and clear thinking.
To me, the genius of journalism is to try to make it understandable to the little guy, the people who do that are indispensable, leading us across intellectual chasms. I also like common sense thinking. I love this quote: “Everybody gets so much information all day long, they lose their common sense,” from Gertrude Stein. That is so true.
Some people criticize markets coverage on television for being too promotional. How do you respond to that?
Yes, I do see some people coming on camera thinking they can use their time as a commercial for themselves. There are more “Is” in some of their comments than all the eyes in China. OK, that’s a joke stretched thin. But seriously, I think the viewer sees right through that, how transparently self-serving they are, and it only hurts those who behave like that.
Our team likes to break news, dispel myths and expose big subjects and players. My favorite columns in recent months were breaking news scoops on the Democrats behind the IRS targeting of Tea Party conservatives. Also we broke the news on SeaWorld in my two-part series on the theme park operator, called “SeaWorld of Problems” and “SeaWorld of Earnings Problems,” which exposed the truth behind SeaWorld’s bad earnings and its coverup of the death of their trainers by their Orcas.
That is to say, the stories explained how the private equity shop Blackstone bought SeaWorld, loaded it up with a boatload of debt, and then sucked a lot of money out of SeaWorld in the form of management fees and dividends. SeaWorld survives on its ticket sales, so that is why they’re out there doing a lot of top spin on their earnings performance, with fake cash flow figures like “adjusted cash flow” which avoids all sort of expenses. Execs appear to be doing that, to calm the markets, that SeaWorld can handle its debt, a debt pile that is about the size of its entire market capitalization.
Do you think there’s too much, or too little, stock market coverage, and why?
I think there is too little coverage, given how the quality of our retirement relies so heavily on the markets.
When you’re reporting on the markets, what do you hope your viewers learn?
How to invest by valuing companies. How to read corporate balance sheets, earnings statements and cash flow statements in order to invest in companies. That in times of high volatility, the markets act like a voting machine instead of a weighing machine.
And perspective. U.S. stock markets haven’t experienced a 10 percent correction since October 2011. Since 1928, markets have averaged about three 5 percent corrections each calendar year. Also, since 1928, there have been 50 up Octobers with an average gain of 4.1 percent, and 36 down Octobers with an average loss of 4.7 percent. The worst one was October 1987 with a loss of 21.8 percent. And every year since 1929, when there has been a midterm election, the market is up on average about 8 percent a year later.
Who are other stock market reporters that you think do a good job?
Too many to name here. I’m honored to work with them, they’ve got passion, hunger and drive. Those are the ones I love. The ones who are hungry, but have the honesty, decency and integrity to edit themselves and not beat others up on camera. It’s sad that too many people demean themselves by personally insulting others, they can’t just be happy with how talented they are. Then there are others who bring clichéd, unfaceted analysis, who ceaselessly and in rather boring fashion have to politicize every issue. That’s tedious too.
What would Margery Kempe think about the stock market?
You’re letting me plug my new book, Skirting Heresy: The Life and Times of Margery Kempe, thank you! Margery was a businesswoman, she was a miller and a brewer. I think she would be the CEO of a Forbes 100 corporation if she lived today.