This popped up on my screen (full disclosure: I was searching for the transcript where I could find the following quote: At Yahoo’s shareholder meeting today, a scuzzy shareholder [named George Polis] said to Marissa Mayer, “I’m Greek and I’m a dirty old man, and you look attractive.” He then asked about a dividend. via DealBreaker) and I thought I had to write at least something short on it. In this report Gene Munster of Piper Jaffray basically states that Yahoo! Inc. (NASDAQ:YHOO) being ‘cool’ is more important than fundamentals.

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I thought the title ‘Perception Of Yahoo! Turnaround May Be More Important Than Reality’ was bad but then came the content. A line like this is just totally ridiculous to a fundamental investor such as myself ” while the reality of whether Yahoo! actually will turn around may be irrelevant (like the true valuation of Alibaba), if a majority of investors decide Yahoo!’s core is improving the stock will work regardless of the ultimate reality.” While the sell-side gets enough blame, this quote is much more fitting on a yahoo message board.

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‘Perception Of Yahoo! Turnaround May Be More Important Than Reality

This is not the worst sell-side note this year, that award goes to the one in this article D.A. Davidson  After Massive Flip Flop Says Herbalife is Now ‘our Single Best Idea’, but ranks up there.

I am copying the executive summary below. It is too painful to dissect line by line, but what do you think of Munster’s note? I should note he does hedge his remarks by stating he remains cautious, but that is a pretty common remark analysts use to have an excuse if their idea fails.

While shares of YHOO working from a stock standpoint appears to be becoming a self-fulfilling prophecy, we believe the jury is still out on whether Yahoo! Inc. (NASDAQ:YHOO) as a company can turn around. We believe that some investors are getting on board with Yahoo! as a turn-around story. CEO Marissa Mayer is approaching her one-year anniversary and has arguably done more to strengthen Yahoo! from a product standpoint through new focus on mobile and the acquisition of Tumblr than the two CEOs before her. However, we believe it is hard for internet brands to turn around, noting both AOL and MySpace have failed to meaningfully rejuvenate user numbers and brands. The bottom line is that we remain cautious on calling the turn-around before seeing more solid evidence that is underway.

• Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer Has Made Significant Changes.

Since Marissa Mayer took over as CEO of Yahoo! last July, she has made significant changes at the company both tangibly and intangibly. Tangibly she has refocused the company on mobile, changed internal policies, driven product updates and more. Intangibly she has improved Yahoo!’s standing as a legitimate acquirer of important Internet start-up companies with Tumblr as a recent example. While the reality of whether Yahoo! actually will turn around may be irrelevant (like the true valuation of Alibaba), if a majority of investors decide Yahoo!’s core is improving the stock will work regardless of the ultimate reality.

Bull Case Investors May Look To Tumblr For Ad Turnaround.

Yahoo! Inc. (NASDAQ:YHOO)’s net display business went from growing 1% in the quarter prior (Q2 2012) to Mayer’s arrival to flat, down 5%, and down 11%. We expect display to be down 11% again in the current quarter. Given the current investor psychology, we believe the optics of the incremental revenue from the Tumblr acquisition will be viewed positively in relation to the display growth rate even though investors will be aware that it is not organic.

• Yahoo! Inc. (NASDAQ:YHOO) Needs To Re-excite Media Buyers, Not Just Users.

Based on recent conversations with a media buyer at a large ad agency, we believe that the consistent change at Yahoo! over the past three years has hurt continuity in relationships with agencies. We believe that agencies are finding large audiences with other media properties and the various platforms given rise by the RTB trend. To this end, we believe that Yahoo! has to also convince advertisers that its audience is still important and that it can deliver unique media experiences, which we believe has yet to happen.