Posts Tagged ‘cnn’

CNN Money Tries to Cast Shadow On Gun Manufacturers

April 18, 2013

CNN Money published this article today:

Gun stocks lag after gun control bill fails

The article starts with a very ominous statement:

Gun sales have been driven by many new buyers, including women, who feared more gun restrictions. But with this incentive gone, the industry could be in trouble.

The author then tries to use statistics to convince you of this fact. I love statistics, because they allow liars to paint themselves into obvious corners. The article lists five companies, and their recent change in stock prices, from best to worst:

Company Stock Price Change
Smith & Wesson gained 1.3%
Ruger lost less than 1%
Olin Corp. lost 1.2%
Alliant Techsystems lost over 2%
Cabela’s lost almost 5%

First, you can’t measure ANYTHING on a single day’s stock movement. But let’s say you can. The theory is that gun/ammo sales have been hurt by the end of the “gun scare”, right? Then why is it that the three companies that sell guns/ammo exclusively have done the best out of these five, one of them even gaining stock price? In fact, the two that have dropped the most only get a *portion* of their sales from guns and ammo.

You’d think if gun/ammo sales were dropping off, the companies who ONLY deal in guns and ammo would be hit the worst, and companies who sell lots of other things might be affected very little, if at all.  But the reverse is true.

Why would the interwebs lie?

CNN is left-leaning, and this article is in their Money/Investing section. What better way to try to force a drop in stock for the companies you think are “evil”, than to take advantage of an arbitrary dip to try to scare shareholders into panic selling?