Writing for finance: 10 tips from a mildly successful blogger

Do you need to write advertising materials to get more customers?  Do you need to write analyst reports for your boss?  Here are 10 tips on how to be a more effective writer.

Tip #1: Have a simple story

Do not tell multiple unrelated stories.  People will quickly lose the plot.  Just stick to a simple story.  If a stock pitch is a sum-of-the-parts story, just say that.  Don’t start getting into other storylines such as industry growth, owner-operators, management incentives, etc.  While all of those can be good stories, just pick one story and stick to it.  Later on in an article, you can tie other sub-stories back into the main story.  If a stock is a sum-of-the-parts play, you can tie share buybacks and financial engineering back to the original story.

Or take this post for example.  I’m going to talk about several different ideas.  Most of them are unrelated.  But to simplify the entire post, the “story” is that you will get 10 tips on how to write better.  I am packaging it as a single bundle rather than 10 different stories at once.

Tip #2: Have a good hook

“This stock is slightly under/overpriced” is not an interesting angle.  People will quickly lose interest when you come out with a boring story.  You want to pick out something about your topic that is really interesting.  Suppose that you’re writing about iron ore miners.  Rocks are boring… but you can make them interesting.

  • Cliffs:  The CEO is a raging narcissist.
  • Kumba Iron Ore:  Their mines are crown jewels in the industry as they have some of the highest margins in the business.
  • Vale:  The Chinamaxes were a dumb idea.  (Or talk about crown jewels or the tailings dam failure.)
  • BHP:  This company will always be complicated because it’s not a pure play.  You can do a sum-of-the-parts story if the valuation is quite out of line.  If not, you can rag on management for some stupid thing that they have done, e.g. the hot mess that is the Jansen mine.
  • Some junior exploring for iron ore:  It’s a scam.
  • Labrador Iron Ore Royalty Corporation (LIF on the Canadian TSX exchange):  Talk about why royalties are good or why the underlying mine is bad.

While a topic might seem incredibly boring at first glance, you can always play up an interesting angle.

Tip #3: Understand what your audience’s problems are

Your audience will generally be concerned about 3 things:

  1. They want to make money.  Because most investors are long-only investors, they will have zero passion for short ideas.  They will have no short interest.
  2. They don’t want to lose money.  If you have negative opinions on various companies, you can get long investors interested in your insights by repackaging your ideas into how they can avoid bad investments and frauds.  That type of article will be far more useful to a long-only investor.
  3. A surprising number of people are narcissists.  Narcissists have messed up emotional needs.  Because they have ‘babydick syndrome’, they cannot tolerate criticism.  If you need to pander to these people, criticizing their decisions will be like playing with fire so don’t do that.  However, narcissists have weaknesses that can be useful.  They have crazy grandiose fantasies in which they are amazing and they never fail.  They will try very hard not to admit to failure.  If you feed them with what they want (admiration, adoration, adulation) and give them palatable excuses as to why their plans aren’t working out, then you will stay in their good graces.  What that means is this: validate their crazy ideas and fantasies.  When things go wrong, give them excuses that they can use.  Give them ammo that they can fire against anybody criticizing them.
    • If you are writing up a stock for your boss, validate your boss’ opinions and ideas about the company.
    • If you are dealing with your investors, validate their investing ideas and never push them into a position where they should acknowledge their flaws.

Tip #4: Most people will not read what you write

The vast majority of readers will look at the first few sentences, decide on whether or not they want to read the whole document, and maybe skim over the document instead of reading it.

Because people skim articles, I always try to put the hook in the first few paragraphs of the article.  It has to tell people whether or not they should continue reading.  Because I don’t care about page views, they sometimes turn into anti-hooks where I try to quickly tell the reader whether or not they should continue reading.  I highlight the illiquidity of stocks to drive away the people who can’t spend time reading about illiquid stocks.  I try not to waste people’s time.  If your goal is for people to read what you write all of the time, then stick to interesting hooks and interesting topics.

Tip #5: A few articles will have almost all of the impact

The most viewed blog post from last year has 31X the views of the 25th most viewed blog post.  Only a small handful of blog posts account for almost all of this blog’s views.  What this means is that it’s a good idea to try a lot of different articles.  If you shoot often, you will eventually score.  Nobody really knows how to predict if a particular piece of writing will be a winner.  Writing is generally inconsistent, with a few big hits that will account for almost all of the impact.

Tip #6: Use simple language

You want people to understand you, so write in a way that makes it easy for people to do that.  You aren’t writing an academic paper so avoid complex sentence structures and terminology that nobody understands.  People already dislike reading 10-Ks, so making things more complex than a 10-K is just a crime against humanity.

Tip #7: It’s ok to talk about things that nobody understands

There are certain circumstances where maybe you don’t want other people to understand whatever it is that you’re talking about.  For example, let’s look at Jamie Dimon’s shareholder letter for JP Morgan (mirrored here).  On page 34, he starts spewing some bullshit about cloud computing and starts using the word “refactoring” inappropriately.  Refactoring simply means that the programmers are rewriting the code to make it easier to maintain.  By definition, refactoring does not add features to a program (such as compatibility with cloud computing); but that’s exactly how Jamie Dimon is using that word.

We will be rapidly “refactoring” most of our applications to take full advantage of cloud computing. We then can decide whether it is more advantageous to run our applications on the external cloud or the internal cloud (the internal cloud will have many of the benefits of the external cloud’s scalable and efficient platforms).

In general, when somebody talks about technology, it is highly unlikely that the audience will actually know the subject matter.  Whoever proofread Dimon’s letter clearly doesn’t know any computer programming.  That makes sense because most people in the world aren’t computer programmers.  So, the lesson is that you can usually get away with bullshit because nobody will notice.  That one guy who points out that it’s bullshit usually gets ignored.  In 2016, Amnon Shashua came out and said that Tesla was being incredibly irresponsible with its “self-driving” car technology.  See the 57:35 mark in this presentation that Shashua gave.  Three years later, finance Twitter is waking up to the fact that the Autopilot mode in Tesla cars is surprisingly dangerous.  The “lesson” here is that bullshitting people is usually safe even if the CEO of your ex-supplier (Mobileye) publicly calls you out on it.

To bullshit people effectively, start with your simple story and talk in a way that people will understand.  Then you can flesh out your story with a little bullshit here and there.  When you start talking about technology, people will just take your word for it if they want to believe that what you’re saying is true.  Nobody wants to look dumb by admitting that they don’t know enough about technology to spot bullshitters.  Nobody wants to acknowledge Amnon Shashua because they want to believe in self-driving car fantasies where people aren’t dying due to Elon Musk’s delusional narcissism.  So feel free to play the bullshit game because it’s usually safe to do so.  (But please don’t pull an Elon and get people killed.  Murder is not cool.)

Tip #8: Failing isn’t as bad as you think

If you make some bold prediction that turns out to be completely wrong, don’t panic.  Surprisingly, people care a lot less than you think.  For example, you can go through this blog and dig up my posts on QXM/XING (the CEO ran off with the cash), ASPS (regulators killed their industry), AMD (the crypto GPU died and the stock went up regardless), YONG (the merger closed before their website did), etc.  I lost a lot of money on those stocks.  Surprisingly, people don’t care too much about those failures of mine.  If you screw up in an honest way, people usually leave you alone because they don’t want to be rude, because they don’t want to target you and because there’s no outrage.

Journalists make failed predictions all the time and nobody really remembers them.  Fund managers blow up spectacularly… but then they get second chances.

Now I’m not saying that you should go full-on YOLO (you only live once) and make insane predictions.  While it has worked out pretty well for Elon Musk so far, I’m not saying that you should or shouldn’t do that.  I’m just saying that you shouldn’t get too wrapped up in your failures because other people will care less than you think.  If you don’t want a huge backlash from others, be honest and don’t be a charlatan.  Others will be far more forgiving of your mistakes.

Tip #9: Publicity

Here’s how referrer traffic for my blog looks like (by views):

  • Search – 119,639
  • Twitter – 14,549
  • CornerOfBerkshireAndFairfax.ca – 6.840
  • Reddit – 4,831
  • Hacker News – 2,906
  • Facebook – 2,898
  • ValueAndOpportunity.com – 2,425
  • MarketFolly.com – 2,225
  • OldSchoolvalue – 2,216
  • People who subscribe to the blog are a very substantial source of traffic (maybe a third to a half???).

I don’t put much effort into promoting my blog.  But here are some tips:

  • Search:  It takes 1-2 years to build this up.  If your content is great and you put a little effort into promoting it, other people will start linking to your site.  If you want to go out and get links, contact other bloggers and content creators through email or Twitter.  You can ask about doing a guest post on their site; this will get you a great link back to your own site which will boost your search engine placement.  The way somebody got me to post about Sino Grandness is because they asked me for free publicity and I liked their work.  If you want a free link from me, figure out the John Malone Liberty complex (because it’s a lot of work) and I will probably say yes to you.
  • Twitter:  If your content is great, other people will naturally advertise for you on Twitter.  You can see all the links to a particular site by searching Twitter to see what natural word of mouth looks like (ignore all of my Tweets).  If you want to develop your own Twitter following, look at what accounts like @BluegrassCap, @HardcoreValue, @BarbarianCap, @ActivistShorts, @ValueWalk, etc. are doing by putting out a lot of good content.  Once you have a Twitter following, you can Tweet out your own content to get a few extra views.
  • Corner Of Berkshire And Fairfax:  Follow the forum rules and post your writeups there.
  • Reddit r/securityAnalysis (link):  See their posting guidelines… you can probably post your own content there.
  • Facebook:  Nope.  Nobody uses it for finance / analyzing stocks.  For other topics, Facebook is a huge source of word-of-mouth traffic.

To recap, getting traffic comes down to a few things:

  1. Write great content.
  2. Write about topics with broad appeal.  My problem is that I write a lot about shorting smallcap stocks, which has a very limited audience.  Instead, you could write about blockchain as that led to two of my most popular posts.
  3. Optionally, ask other content creators for links.  Instead of blatantly asking for a link, you can offer to create some content for them.
  4. Optionally, post your writeup in places where people post writeups.  However, this won’t really bring in that much traffic.

To be clear: the key is to do the first two things.  That is the best way to get traffic.

Tip #10: End with a twist

A generic formula for an article is:

  1. The hook.  Tell a simple story to get somebody interested in the rest of your article.
  2. The meat of the article.  This is where you give your supporting evidence, get into the nuances, etc.
  3. The ending.

The ending is the part that often takes me a lot of time.  The uninspired way of doing the ending is to simply recap everything that you’ve said.  It’s slightly better if you summarize the most important conclusions of your article.  In this case, the most important lesson would be to “write great content”.  It’s a pretty crappy conclusion because it’s almost like saying “the key to being a great writer is to be a great writer”.  So I’m not going to go with that.  The other way of doing an ending is to do a twist.  You can throw some interesting insight or angle on top of the story that you’ve already told.  So here goes…

Tip #11: Don’t worry about the messenger, focus on the message

I promised 10 tips and now here I am with number 11.  Did you care?  Probably not.  The lesson is this: don’t worry about the little stuff like having a great title, ending with a twist, having a beautiful blog design, random rants at the end of an article, etc. etc.  That stuff honestly doesn’t matter a lot.  It’s the message that really matters.

Good luck in your writing endeavours.

 

 

*Disclosure:  No position in JPM.  Short TSLA (but honestly I am sick and tired of the TSLAQ crowd).

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