If I asked you to name two things currently in decline, you might very well say real estate and newspapers. Now, it looks like real estate brokers are kicking newspapers while they're down. According to a piece on Bloomberg, Richard A. Smith, the President of Realogy -- which owns Century 21 and Coldwell Banker, and is owned by Apollo Management -- says the company will shrink the portion of its branding budget devoted to newspapers by two-thirds next year, compared to 2006. Who looks for real estate in the newspaper anymore?
According to Smith, "It's going to be bloody. The newspaper industry is going to have to adjust."
This is just the latest in a whole series of news stories that have been coming for years demonstrating the decline and fall of the newspaper industry. Are the stocks of some top newspaper companies a good contrarian bet?
I consider myself a contrarian investor, but even I wouldn't touch these. The industry is in the midst of an accelerating downfall, and a lot of newspapers aren't earning any money now. Is there any reason to believe that the future is going to be any brighter?
As Warren Buffett has said, every time an elderly person dies, that's another newspaper reader gone who won't be replaced. Who wants to own a business where your customers die every minute and there's no one waiting in the wings to replace the revenue?