A very interesting article was
published in Crain’s New York this morning, both in print and online,
titled Prophet of doom. The article was about blogs, and
the potential for them to raise capital and compete with the mainstream
media. There’s also a picture of a devilishly handsome, charismatic, and
outright cute blogger there as well 
Here are a few excerpts, combined with my usual commentary…
- Mr. Middleton’s Boom Bust Blog forecast
with stunning accuracy the demise of such real estate bubble blowups as
Bear Stearns and mall operator General Growth Properties… Now he’s
embarking on his next project: Turning his blogging hobby into a
full-fledged investment research business, a firm where he says
investors will get “realistic” insights as opposed to Wall Street
puffery. Mr. Middleton plans to start petitioning venture capital firms,
private equity players and established media companies in the coming
weeks.- Yes,
it’s official. I’m going to start building the blog out into something
much bigger, more in depth, and more accessible.
- Yes,
-
“His work is so detailed, so accurate, it’s among
the best in the world,” says Eric Sprott, CEO of Sprott Asset
Management, a Toronto firm that manages about $5 billion and subscribes
to Mr. Middleton’s research. Well,
thank you Mr. Sprott! I owe you a bottle of wine for that one!
For those that don’t follow Eric Sprott’s commentary (or his investment
record), this accomplished man tells it like it is. He was just on CNBC and rang the closing bell last week.
-
Finding investors won’t be easy, though. A few
bloggers have landed backers recently, including Footnoted.org, acquired
by investment research firm Morningstar, and Gothamist.com, by
Cablevision. But most media concerns and venture capitalists have
steered clear. Many blogs’ revenues are scant, with few opportunities to
grow and churn out the $10 million to $15 million in revenues that
venture capitalists want. “The climate for blogs is almost always
lousy,” says Roger Ehrenberg, founder of IA Capital Partners, which has
invested in BlogTalkRadio and BusinessInsider.com. Many blogs don’t generate
profits or have a clear or sustainable business model. I plan to be
different (then again, I suppose so does everybody else). For one, I
realize the folly of attempting to run a business on advertising revenue
(notice there are no ads on BoomBustBlog). I also believe (actually, I
know for a fact) that people and institutions are willing to pay for real,
truly in depth analytical content. This is where the
mainstream media is failing. When the paradigm shift into distributed
computing and the resultant frictionless media model occurred, the
mainstream media fought it instead of embracing it. A typical old school
reaction. As was inevitable, it was a fight that they were destined to
lose. As they saw they weren’t winning, the MSM pared back the resources
in its press room, slimming or eliminating investigative journalism and
inhouse expertise at the very time when they should have been adding
to, and building up those resources. Long story short, they gutted their
profit engines when they were most needed. Now, they are starving from
trying to subsist off of volatile and dimishing ad revenue models, while
at the same time throwing their arms up in bewilderment at their
inability to charge directly for content. The reason why most of the MSM
can’t charge for content on the web is not because content is given
away for free. It is because much of the content is not worth paying
for. Instead of breaking truly original, groundbreaking stories born
from vigorous investigative journalism, media entities are repackaging
AP and Reuters content. Instead of thorough rigorous analysis of the
issues, media entities are serving as the mouthpieces of special
interest groups, simply distributing soundbites and media clips toting
the party line. While the public seems to consume that fodder en masse,
those with two synapses close enough to carry a spark will not pay for
it. It is that very same proximal synapse crowd that you should be
targeting with real meat, and it is that very same crowd that will cough
up a few pennies to consume your content. And no, it is not available
for free over the Web. It is too expensive to produce, and too valuable
to have, to be disseminated as freely as the latest review of “Dancing
with the Stars”. Until the MSM get’s it, they will continue to be eaten
by the Web while sticking their forks into the carcass of the rotting ad
model, instead of feasting off of the ability to reach more people,
more inexpensively than ever before. The key is that once you do reach
them, you have to have something worthwhile to offer!- Such words fail to discourage Mr. Middleton, even though his bearish
blog faces other challenges as the stock market recovers. Traffic is
only a quarter of its 2008 high, according to Quantcast research. Mr. Middleton blames the drop on fad-chasing investors jumping
on the bullish bandwagon, and insists his remaining audience is loyal
and sophisticated. Well, while no one actually wants less traffic, I now have a
much higher quality of traffic. In addition, traffic means a lot less
to my business model. I am not reliant on ad revenues and eyeballs, thus
who comes by is much more important to me than how many people come by.
Unbeknownst to many on the blog, your fellow commenters, subscribers
and readers include many of the swifter members of Congress and the
Senate, strategy and prop desks from the largest global banks (yes, the
very same ones that I am so hard on, no one gets cut a break here – even
subscribers), analysts from prominent central banks (I’m not going to
mention which ones, I’ll let you guess), and some very bright family
office and investment managers such as Mr. Sprott and Mr. Riley quoted
above. Some of the retail investors from a year or two ago confused me
with James Cramer, looking for hot tips and trading advice in lieu of
deep analytical research. Hey, Cramer has is place in the investing
world, it is just that we don’t share the same space. The positive news
is that traffic is building back up, and is building with a prime
audience. On the subject of traffic, I very recently realized that I was
shooting myself in the foot by not have nearly as optimized a site as I
could have, hence offering traffic that I should have recieved to other
sites that would syndicate my content. It is being rectified, along
with a heavy dose of cell phone and portable device friendly interfaces
and complete integration with the social media favorites, Twitter,
Linkedin and Facebook. Let me know how the stuff is working.
- Such words fail to discourage Mr. Middleton, even though his bearish
Reggie,
You might want to consider reducing the clutter in your writings. Specifically, all the references to your past writings. I'm not saying you shouldn't let people know about your good calls, but sometimes it's hard to follow your point because it's interrupted by so many references to previous essays. Perhaps a statement in parenthesis in the first paragraph of an essay to see previous essays below, and then a list of links to previous essays at the bottom.
Also you had an issue with formatting. The central column would expand into the stuff on the right side, forcing the user to increase the size of their browser window to read everything. I'm not a paying subscriber, but I appreciate the stuff you make available for free. I do pay for other premium services, and if I was more involved with real estate I'd definitely consider paying for what you produce.
Prophet of Doom? As a ZH lurker myself, it’s been a relief to see and hear first hand information from the trenches of the financial world during these days of realignment. Truth is where and what it is and the cackling of fools is just that. On the other hand, entertainment is where you find it and it’s all that more pleasurable when it’s more true than not. But that may be just me.
I’ve grown to appreciate ZH all the more when information is substantiated in the traditional 4th estate that has been common knowledge here forever. It may be evidence to my reluctance of “going on to maturity”, that I still give credence to traditional sources to corroborate ZH. If doom is the destination for main stream, it will be death by suicide, not homicide. Truth will survive.
Rev 3:18-counsel from a resurrected Christ.
Reggie,
The only way I think you can seriously profit from your research is to partner up with some Financial Asset guys and offer investors some way to trade based on your research. Alternatively, write a book and use your site as a means to help advertise your book (like nakedcapitalism.com and econned).
BTW... I also agree that your research is top notch.
Rich
I've ran three network news programs side by side on the same date and been amazed they not only all ran the same stories but they ran them in the same order and assigned each almost the same amount of time.
I don't mind filtering the information I get from blogs. If I have two blogs reaching different conclusions but each displays a thoughtful analysis of how that conclusion was reached then they both are more valuable than a consensus MSM clone story speaking to me like I'm a five-year-old.
Most middle class, middle income people would rather make small payments often than fork out several hundred dollars to find a feed wasn't as good as you were hoping or that the small sample that moved you to subscribe was a one off wonder and the well quickly ran dry. If it stays good I'll keep paying gladly.
Hey Reggie,
It's not Blogs that don't pay well...
...it's the "truth" that doesn't pay well!
...but then again, shouldn't the truth be free?
All the best, Miss America - RH
MA do you still spend time over at Roubini's?
Good job Reggie!
I am a subscriber to your blog but I've been reading you both directly and through ZH and others for quite a while.
You, Tyler and a few others - most notably Ed Harrison at Credit Writedowns and Mish Shedlock at Mish's Global Economic Analysis produce such a quality, rant-free product that I would gladly pay to get the material. At the present time, though, funds are scarce as I am trying to build my own trading business (thus far, so good), but as I prosper, so shall you through a paid subscription and vigorous word-of-mouth support.
It is my firm belief that Bulls and Bears who do their homework and follow a plan can make money in almost any market. Pigs, however, and those too lazy,undisciplined or stupid to put in the required effort should lose money.
My efforts are on admittedly a sub-micro scale (AUM<200K), but I do manage what I have and the trend has been positive from day1 thanks to you and others, and NO THANKS to the assclowns of the MSM.
Keep up your good and entertaining work.
KrvtKpt laughing swordfish
DKM trading division
It's official, you're my favorite clown.
well some bloggers seem to keep working or have for profit work .. and still find time to be very effective
the side blog business is a labor of love . Which in the long run may or may not bloom into profit
some just have a pay to read policy . talk about something that many want to read charge the standard $250 please or come to some acceptable level
even 40 bucks a year with 3000 or so readers can turn the tide ..
the news papers are losing it .. because they slap the truth around until it is never found.
the medium is the message ,, new ways of spreading the truth ,
I do not consider bloggers any better or worse than mainstream media. There are many good bloggers, a few outstanding bloggers, but the majority are mediocre. What I like about ZH is that it collects some good bloggers who have experience and knowledge on specialized topics. It's that "informational edge" that's missing in MSM. That, and the fact that most of us are independent and we don't give a rat's ass about who we piss off when writing our comments (at least I know I don't).
an oz of truth .. is better than five pounds of B.S.
as for the people that want to see english type term paper composition .. and have really nothing to say but use a red pencil .. fade um lol
on the very most part .. keep getting that oz of truth in. thanks
Well said Reggie. Nothing is more boring or useless than the current crop of talking heads. They are celebrities (famous for being famous). They never learned a trade, so they have no respect for anyone else's trade, or how work actually gets done. They come across as spoiled 12 year olds.
Be careful with the New York thing. I always have fun there, but the city is the least typical place in America. That's part of the MSM problem. A big part.
Best of Luck.
LOL. escape the borg!
On the otherhand Kaiser, being exposed to these clowns (I am a squidville resident) can really be quite motivating. Seeing the excess and corruption first hand makes it more real instead of "those people over there." If Reggie has not been co-opted by now, I think he will be OK.
I myself have seen a close family member get absorbed by the borg; once the most down to earth, friendly guy, he has lost touch with reality, its sad. Back in 2005 I was working on a Freddie matter, tried to explain to him its all going down (i.e. housing prices can not go up exponentially for infinity, esp. with NINJA loans), he looked at me like I was crazy, and said the MBS model would work in perpetuity. As I type this, there is a hearing in Congress right now regarding his former employer. Groupthink is a bitch.
i didn't see the extra underlines, but what's with all the italics? why not start using different colors too and different fonts and sizes
usually blogging is just long winded comments of MSM articles. Rarely do they do any first person research/gathering on their own.
Mainstream media is caught in the "Hollywood" media paradox. In order to gain access to the 'stars' they have to be kind to them. Then once they have access they succumb to offering nothing but the stars 'spin' and transmogrify from a 'news source' into a CNBC.
Reggie, don't pitch anyone, when people spend money on you then the want to have input into how things are run, maybe not now but later. Continue to be innovative and get endorsements like Sprott's and you will be just fine, independence is worth a lot more than a pile of money!! My two cents and I really enjoy your work, keep it up!!
Congrats on the coverage. Keep up the good work.
Which VCs are you pitching?
I haven't pitched anyone yet, but if you have any ideas or suggestions, I am quite open.
Congratulations!
You have consistently done the work and inspite of the volume of craziness in the blogosphere, your quality work is getting recognized.
I agree that people will be willing to pay for quality in the long run.
Congratulations!
You have consistently done the work and inspite of the volume of craziness in the blogosphere, your quality work is getting recognized.
I agree that people will be willing to pay for quality in the long run.
It's past time for spell-check and proofreading, Reggie.
It is the truth. The MSM in Australia, particularly the Murdoch media cannot stop itself from wearing strong political partisan glasses. Pushing the politics is more important than the data and its analysis making their papers worthless.
Even the Australian Financial Review is unable to keep itself from putting on party political glasses with a number of its features. You would think they would know their readers are most likely to have fixed political beliefs that wont be swayed and are more interested in the information, data and analysis.
The best thing murdoch and others can do is put all their stuff behind paywalls so we all dont have to see it.
It is actually pretty hard to find good current economic data and analysis and the only place you can really find it is on-line. It is now the first place people go to find this type of data and analsyis.
Go Reggie!
+1
Ditto in the USA ... the quality of the reporting, writing, analysis, and editorial selection in the USA is abominable. The writing is poor, with bad grammar, poor spelling, factually incorrect statements, and even wrong word usage. Quite literally many of the big media writers fundamentally do not know the field they describe nor understand the words they use. You can actually get *dumber* consuming the big media products.
To some extent it's understandable (smaller budgets, shorter time-to-market leads to less research), but it's entirely unacceptable (many of the "professionals" are themselves incompetent in their own field: The lowest academic scores in our universities come from the "education" majors, only to be rivaled by the poor performance of the "journalism" majors.) Big media does not provide a product for which I will pay, much less waste my time processing.
Reggie is a great example of what's good, and what's replacing the big media houses -- truly novel research, strong analysis, and great presentation. It's what journalism *used* to be, before media was co-opted into mere partisan political machines.
Agreed. Most news in the States is rehashed AP and Reuters or talking points from the WH, no one will step on any toes.
Breitbart Media digs deeper, but obviously has an agenda to push.
This is what ultimately kills blogging I guess: the profit motive.
So, how do you continue hard core blogging without the money to sustain it? Inquiring minds want to know.
Real traders put their money behind all of their glorious trading tips that they publish and they make millions.
Blowhards and Con-men do not.
I must have missed your point. I invest solely off of my own research. I don't give "trading tips" (that's James Cramer, don't we look and sound different???), and most traders don't make millions trading their own account. Relatively few traders make that amount if one were to actually take a tally, and most of the traders that make millions make it trading someone else's capital.
Those who make millions that you are probably referring to are "investors" not necessarily traders. I can't commnet on con-men, but you appear to be a bit of a blowhard.
In addition, running a media concern (even a blog) is a full time endeavor requiring resources of its own. Ask any prolific blogger and they will tell you.
Your little blog has been around since Oct 10 2007. Successful sites take off almost immediately, ask Tyler. That should say enough. But in your case you typically need a neon sign to get the point so imagine this flashing in Times Square:
FAIL
Oh, okay. I get your point now. You're one of those anonymous trolls who feel they need to belittle people in public to feel good about themselves. Well, Mr. Asshats, my "little blog" and I are doing just fine. We obviously have you as part of the loyal audience since even I don't even know what day the blog started.
PS. I love you too!
:-)
Swank pad Reggie! Is that Zeus in the background or that other guy?
Best of luck. Your analysis has truly been outstanding.
It's actually an abstract of my father, made to represent the all father in any religion or mythology you choose to apply your imagination to. He is flanked by an abstract of my two sons.
Cool!
Obviously a setting like that just begs for a killer sound system!
Hey, I'm an overgrown kid. My 18 year tells me to cut my music down! :-)
In that case RIP to Guru. I wish you luck, blogs (even paysites!!) are our only chance for democracy to work. The MSM is a JOKE.
Too much underlining, Reggie. Use it just for particular emphasis.
duh to much yak about nothing selah
Selah is exactly right. Quality commentary is that much better if it is succinct.
You're right. reformatted...
Much better!
Now let's break up the huge paragraphs into something more visually appealing.
Quality Content shouldn't mean difficult to read, and quite seriously, you need and should be able to afford to hire an editor. I hope that you consider it...
Actually, and quite seriously, how would I be able to afford to hire an editor if you aren't paying for the editorialized content. This goes back to the argument of the large media companies. These free posts are thrown together that 3:30 in the morning before I start my work day. The subscription material gets reviewed three times before it is published, but then again there is a revenue stream to pay for the people to do that.