With media stocks beaten and battered, pundits are already starting to wonder whether now is the time to buy them up on the cheap. Of course, in this market, only those with stomachs of steel dare make any significant bets. One week the Dow is up 10%. The next, it’s down 15%. To say it’s hard to know when to jump in is just about the understatement of the century. But to be sure, media stocks haven’t been this attractive in a while—and that’s partly because they are heavily dependent on advertising revenue and therefore fall first when the market believes a recession is imminent. Now that we’re apparently in the middle of that severe recession, it seems logical that at some point they will bottom out and then lead the surge upward as the country (and the world) slowly creeps out of the doldrums.

Consider the carnage so far this year: Disney down 34.7%; Cablevision (owner of Rainbow Media) down 42.9%; GE (owner of NBCU) down 49.3%; Liberty down 44.2%; News Corp down 63%; Crown down 66.2%; Discovery down 39%; Time Warner down 42%; Scripps (owner of Scripps Networks) down 45.6% and Scripps Interactive down 35.9%; Viacom down 58.4%. It’s just ugly out there!

The trick is knowing when things will start getting better—and no one really knows. That doesn’t keep the newswires from buzzing, however. Just today, analysts were pointing to a 14-month recession that most likely began in the Spring. That means at least another 2 or 3 quarters of pain before things start to get better. Others have more dire predictions: Economist Harry S. Dent, for example, predicts a short rally into 2009—buoyed by stimulus efforts and short-term optimism—but quickly followed by a brutal depression that lasts at least into 2012 and precedes about a decade of slow to no economic growth. He thinks it will be worse than the 70s but not quite as bad as the 30s. Either way, if he’s right, now may not be the best time to jump in. Just ask people who bought Japanese stocks when things “couldn’t get any worse” in the late 1980s. The Japanese market still remains far below its 1980s peak.

But Dent could be wrong. And several experts are suggesting investors might want to start dipping their toes in the media stock waters in the next few months. A Reuters story getting much play today suggests much disagreement on the matter. Standard & Poor’s Equity analyst Tuna Amobi told the news agency that the media stock pain will last well into 2009. But Larry Haverty, manager of the Gabelli Global Multimedia Trust, said the bottom may be upon us. Who’s right? Who the heck knows? How many of these Wall Street geniuses predicted the cataclysmic market meltdown of the last 2 months? Not many. But media stocks with cable assets are certainly looking into the next year with caution. Anyone who attended CTAM in Boston last week knows that Merrill Lynch’s Jessica Reif Cohen sounded like one of the 4 horsemen during the closing session, predicting pain lasting into 2010. But Discovery chief David Zaslav was more optimistic, especially on the advertising front where many see gloom and doom.

The bottom line is that media stocks will continue to decline until investors feel some level of confidence that the economy is stabilizing. It could be a while.

The Daily

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