Working 10+ yrs as a sell side analyst, it was easy to forget the wide world of people out there who know nothing about finance, for whom EBITDA, CAGR and capital, capitalize, recap, etc. etc. are meaningless and empty. My father ran a manufacturing business for 30 years and still doesn't know what these terms mean.
But even people who don't know about investing, they invest nonetheless, for whatever reason, through a wirehouse account or what have you. I think at the high net worth levels, they fall into the bucket of clients that Goldman called "muppets."
So walking up Avenue of the Americas (ie 6th Ave) in the 40's the other day, passing the Fox News building with its financial news scroll and the E-Trade retail branch, with its CNBC monitors facing the the sidewalk, I took the opportunity to consider what the face of Wall Street - and the face of investing - must seem like to people.
The farside cartoon "what we say to dogs" came to mind. Blahblahblahblahblah.
It all just struck me as so wrong. So unapproachable and confusing, talking at a pace only Aaron Sorkin would love, about things that sound like nonsense to most people.
The nonsense hit me first. Unlike sports, which for most people is an emotional but not financial endeavor, people who know little about Wall Street still invest in it, either through direct retail investment or indirect retirement / pensions investments. This latter class of passive investors could use information that helps them understand what's really going on.
Yet these programs about the stock market - whether its Cramer or CNBC or Fox Business - it's just a pretty narrow variety of blather from 7AM to 4PM. (That these shows are largely meaningless to the professional but for the game theory aspect of "what other people are talking about" is a bit of a secret).
The narrowness of these programs hit me next. The economy is incredibly diverse, yet wall street (in general) and these shows specifically are predominantly white. I realize that most TV lacks diversity and most TV is generally pretty stupid, but these news programs, with their big budgets, have an opportunity to tell stories outside the blips and the crawl and the scroll and the tickers.
But they don't. The economy is vastly important to investors and business owners but we only talk about in soundbites about how the market is up or down.So much time and money is spent working and investing, yet the daily banter on stocks - on radio or TV - is just absurd.
It's really a shame and it really gets my goat.
This all ties into one of my goals in starting my RIA, which is to educate clients about why we own certain companies, who we are investing with and what the expected outcomes are, in plain simple language, regardless of what "the market" does.
I view this goal as hand in hand with being a steward of client capital as well as generating returns ahead of the market, over time and after fees.
- Long Cast Advisers
- Avram Fisher, Founder & Portfolio Manager of Long Cast Advisers, is a former equity analyst at CSFB and BMO covering industrials and business services. He has prior experience in private equity; as a corporate governance analyst; as a writer; reporter and private investigator; and as a lifeguard and busboy (I still clear plates when my kids don't). This blog is an open book of ideas about patient investing and about starting up a small-cap focused RIA. It is part decision-diary, part investment observations and part general musings. Nothing on this blog is a solicitation for business nor a recommendation to buy or sell securities. It is simply a way to organize and share thoughts with an expanding audience of independent, patient and talented small cap investors. www.longcastadvisers.com