Buying On Agenda Setting
By Ian L. Cooper
It was Maxwell McCombs and Donald Shaw that introduced the world to the famed theory of agenda setting, which gave insight to the mass media’s ability to change what people think about. Simply by altering the mass-media agenda via television, print, Internet or radio the public agenda (what people think is important and talk about) changes as well.
Maxwell McCombs, author of “The Agenda-Setting Role of the Mass Media in the Shaping of Public Opinion,” says, “The power of the news media to set a nation’s agenda, to focus public attention on a few public issues, is an immense and well-documented influence. Not only do people acquire factual information about public affairs from the news media, readers are viewers also learn how much importance to attach a topic on the basis on the emphasis placed on it in the news. Newspapers provide a host of cues about the salience of the topics in the daily news – lead story on page one, other front page display, large headlines, etc. Television news also offers numerous cues about salience – the opening story on the newscast, length of time devoted to a story, etc. These cues repeated day after day effectively communicate the importance of each topic. In other words, the news media can set the agenda for the public’s attention to that small group of issues around which public opinion forms.”
This is nothing new. The theory and the media impact is well known. But how do you use it as an investing tool?
Invest in the companies battered by bad press once the news has been fully disseminated and once the media agenda begins to change. Take JetBlue for example: Here’s a company doused with the public perception of an uncaring airline that left passengers stranded for hours in poor conditions, with no working toilets and a lack of food. While true, the story is out. It’s been fully disseminated. It’s been thought about, torn apart and judged by the public and the mass media.
Simply put, we’ve thought about it and talked it to death. And seeing that many consumers have the attention span of a goldfish, I can’t see the news impacting the JetBlue stock much longer. In fact, once the media replaces the story with something new, we’ll forget all about the JetBlue debacle.
You may want to buy JBLU on recent weakness. While the company did revise Q1 and full-year 2007 guidance to incorporate recent service disruptions, we’re surprised by the changes beyond the first quarter. And, we wouldn’t be surprised to see an upide move once the mass media accounts begin to die down, giving way for traffic and revenue normalcy.
Take care,
Ian L. Cooper, Editor, Early Alert Trader