The Whole Story

I was reading a story off of the Seattle Times website the other day and reflecting that sometimes even a really well-written article doesn’t actually tell you everything – or even the most important thing – about the event being covered. Sometimes it’s a matter of the reporter, the editor, or whoever runs the website not getting the facts straight; sometimes it’s rushed reporting or technical problems, and sometimes the people involved don’t really know what they’re doing; and sometimes it’s just that the people behind the story reported the facts accurately, completely and correctly – and missed the one key point that changes the entire nature of the article. It’s another reason to question everything you read, and look at every situation from as many different perspectives as you can…

The story itself seems simple enough, and relatively upbeat for a change. Last Thursday Boeing announced that they had received what will be the largest order in the company’s history; a request from Indonesia’s Lion Air for 230 of their 737 aircraft, including 29 of the new, extended-range version expected for delivery in 2017. This announcement comes on the heels of an order from Emirates Airlines for 50 of the new 777 aircraft, which was the largest order to date in terms of dollars ($18.1 billion USD). Lion Air also has options to order 150 additional aircraft, and over the summer American Airlines announced plans to purchase 200 additional Boeing aircraft of various types (potentially even bigger than either of these deals). One would expect a euphoric reaction from Boeing’s stockholders on this sort of news; however, this might not be the case…

Hidden at the bottom of the page is the notice that Boeing’s stock closed down 25 cents on Thursday, despite the glad tidings these huge orders represent. This could be of no consequence, of course; you’d have to check on the recent trends on the stock price to tell for sure. If you did, you might note that the current price is right about average for the past year (that is, about midway between the lowest and highest prices in the previous 12 months), or that the stock price has improved a bit since October but has not changed significantly over the past week. The actual value of a stock depends on a broad range of historical and accounting factors, and you will need some fairly complex equations to work out what it should be, but the key point here is that none of the people who make their money by speculating on how a company will perform (and whether its stock will increase in value) are reacting in the way you would expect them to react to the news that the company has just received its largest order ever and is now expecting an even larger one…

Now, I don’t pretend to have any expertise in the analysis of stock prices or probable future values; that’s a specialist function, and on my best days I’m just a generalist with a talent for spotting trouble. But then that’s the point – I don’t know what is going on here, I just know that something is missing from this picture. It might be nothing, or it might be the key to figuring out what an entire manufacturing sector is going to do for years or decades to come. But you’re not going to find out what it means without a great deal of additional research and analysis – and you won’t even realize that something else might be going on if you just take the original story at face value…

With the rise of computerized intelligence gathering and analysis software, and expert systems that can extract the one key piece of information you want from a database containing millions (or billions) of entries, it’s easy to forget that the machines are only as good as the people running them. I’m not saying that there is any hidden meaning in this simple story about large product orders being placed with Boeing, let alone that there might be some sinister warning concealed within the text. But just as you should never believe everything you read, you should also never assume that a given article is giving you the complete truth or the whole story…