value and opportunity

Again, time flies. Exactly 10 (!!) years ago on December 15th, 2010, I started this blog. 

As every year a very special “Thank You” goes  to all readers, especially those who actively contribute either by comments or mails. I need to keep on mentioning that the interaction with readers is really driving the motivation to continue the blog in this format.

In this post I will reflect mostly on writing the blog, highlights and lessons over the last 10 years plus my 10 all time favorite book reviews. There will be a 10 Year investment/performance review in the beginning of January 2021. 

Some numbers: 

10 year stat
Year	Visits	% Germany	Posts	Comments
2011	93,811	na	411	694
2012	178,485	49.82%	266	1,368
2013	325,240	43.14%	168	1,243
2014	430,794	32.26%	121	1,068
2015	459,992	25.94%	110	1,105
2016	521,197	28.52%	113	1,645
2017	635,741	28.79%	114	1,580
2018	452,267	28.57%	92	784
2019	325,169	31.56%	84	563
2020 YTD	483,824	39.03%	107	1,211
Total	3,906,520		1,586	11,261

All in all, I managed to post ~1600 posts over these 10 years which created close to 4 mn visits. The drop of visits (and comments)  in 2018 & 2019 was clearly the result of posting less due to a lack of time from my side.

So why I am still doing this ?

After 10 years it is worth reflecting what has actually motivated me to do this. Initially, I wanted to establish a kind of track record and then maybe open my own fund. Over time however the motivation changed as I recognized that actually running a fund with other people’s money would maybe take out some of the fun in stock investing that I actually have.

As I am writing this, I am actually quite happy with my day job and the biggest motivation of writing the blog is the ability to connect and exchange ideas with like minded “Crazy hobbyists” and professionals in this beautiful game called the stock market.

In between I sometimes thought of somehow monetizing the blog but I decided against it every time because not charging money creates a lot of freedom to do whatever you want whenever you want. Once you start charging, you create obligations which then can kill the fun pretty quickly. 

I would compare my blogging (obsession) with one of my friends who is an Orthodontist and whose main hobby is to create hand made fine jewelry from precious metals. The hobby is a lot of fun, trains her hands and for the job and even makes her some money when she sells some of the jewelry to friends.

For me actually there is a two way benefit: I benefit in my day job from what I do as my hobby, but I can also apply what I learn in my day job to my hobby. Over the past few years I also made two (beneficial) job moves that were clearly supported by the knowledge and insights that I build up over the 10 years writing this blog and analyzing investments and businesses in my free time.

As I mentioned a couple of times, the simple act of writing things down for me is a benefit as such. In order to write down a thought, you need to think at least twice about things, reflect them and for me it is also much easier to memorize something if I have written it down once.

10 Years, 10 subjective Blogging highlights

1. David Einhorn commenting on my blog in 2015
   Having one of the (then) most prominent Hedge fund managers comment on your blog is clearly a highlight. I used to look at Einhorn’s letters a lot in the past, because I think he (still) is a very good fundamental investor. However, over time I less and less understood his investments. The actual case, Consol Energy, was clearly a flop. To be honest, I still don’t understand why he does what he does (still shorting Tesla and buying indebted stocks with questionable business models or weak insurance companies).
2. Seeing Wirecard finally going down the drain and being able to tell my personal story in 2020
   I never dared to write about Wirecard in the blog because I knew how these guys tried to chase down each and everyone who wrote something critical. For me it is incredible how long this went on, as already in 2008 (and earlier) there were a lot of signs that the company is not “kosher”. Every day now, another problem from the “German system” surfaces, for instance that the boss of the German auditor supervision agency had been secretly trading Wirecard shares during the investigation. “Gone for good”.
3. Detecting the Globo Plc fraud early on in 2015
   For some reason, Globo Plc, an AIM listed mobile phone software company with roots in Greece became a “hot” investment in the local Munich value investment community. The stock was cheap, grew a lot and made software. A locally well know value investor with normally deep research took a pretty concentrated position which let a lot of people to “piggyback” on this “research”. However, looking at the accounts it was pretty clear that there were some very serious issues. I think at least some people saved some money by getting out earlier before the company went bust.
4. Sapec in 2016 was one of the most successful ideas that were actually sourced via a “tipp” from a reader 
   Thanks to a tipp from a long term reader, I discovered that there was a very interesting special situation available in Belgium especially for Non-Belgian investors. From what I know, quite a number of readers could participate in this attractive investment. For me this was also a nice (indirect) pay off for writing the blog and being connected to great investors.
5. Developing the BOSS score in 2012 and finally abandoning it when it stopped to work
   Pretty early on in 2012, I developed a quant model which I called the “Boring but sexy Stock screen” which initially yielded a lot of very interesting investment ideas, some with spectacular good results (Cranswick, Dart Group). Over time however, the quality of the results declined. I was lucky to conclude that this might have been a fundamental issue and basically stopped using quant screens a couple of years ago.
6. Among my more general finance post, my Enterprise Value post from 2012 mostly stood the test of time
   This is one of the examples where writing things down served mainly to understand the issue myself and then seemed to have helped a lot of people as well. This was part of my journey to detach from Book values and P/Es to more appropriate measures of valuation. From 2013-2018 this was the most read post every year.   
7. Understanding the Implications of the ECB Bazooka in late 2011
   In general, I am clearly a bottom-up investor and try not to incorporate macro-economic expectations into my investment process, as I think this adds little value. However in special situations, especially during crisis it makes sense trying to understand what is going on at a mcro level, especially if important institutions make decisions. In this case, in 2011, with the Euro crisis in full swing, this post helped to reflect on the current situation where almost everyone thought that the Euro area will break up and many countries go bankrupt. It also helped me to allocate money into attractive value stocks in the PIIGS area.
8. Personally, I found my 2014 post on the similarities of football and investing funny (especially after Germany won) and all 7 points hold today
   From time to time it makes sense to move back a step and look at things on a more abstract level. Comparing investing to football, gardening or Golf is both fun and helpful in trying to concentrate oneself on the really important issues instead of chasing the next stock.
9. I liked all my “series” efforts, such as the Watch and the Travel series, but the “All German Shares Series” is clearly the highlight so far
   Creating these kind of series is really helpful in two ways: First of all, looking at “similar” companies in a row makes it much easier to compare companies to each other. Secondly, it also gives me a clear structure at what to look next when I have no other ideas. Sometimes a series like the Travel Series did not create a direct actionable insight but helped me to move faster after Corona hit. 
10. Finally, the “Grenke situation” in 2020 was another highlight from this year
    Other than Globo Plc and Wirecard, this time, with the help of friends and readers I concluded that Grenke was not a fraud despite some very aggressive allegations, which led to an attractive investment opportunity in the midst of a difficult Pandemic market. The final verdict is still out, but for me investment is already closed and the gains “in the bank”. Again, I think many readers could participate in this attractive risk/return situation.

10 Year, 10 major lessons on (investment) blogging

1. The more you write the more views you get
   It’s maybe a little bit to obvious: If a blogger wants to have many readers, one has to write a lot. Maybe there is too much posting at some point in time. However as I do not want to monetize the blog, I do not need to write that much. For me it is much more important to have the right readers
2. The more you write about “Hot” or controversial stocks/topics the more readers you get
   This is also pretty clear: Writing about “hot topics” gives you a higher chance to reach many readers. My Wirecard post for instance generated 44 thousand views alone. In contrast, my initial post on Bouvet ASA, my most successful investment so far with a performance of 5,5x only attracted 1400 views when I wrote it in 2014. As a stock blogger you have to decide early on if you want to go for reach. If yes, then writing about “hot stocks” is clearly the best way to go.
3. You actually get rewarded for “Just showing up” as a blogger
   “Just showing up” in blogging works. Especially during 2018 and 2019 when I blogged less und with little substance, the number of registered users still climbed steadily. I guess it will also be harder to restart after a longer hiatus. Blogging on a regular basis and even only a weekly list of links will keep you on the radar of readers
4. Filtering of information is important
   In the beginning of the blog, I made the mistake to read anything, including “junk” like ZeroHedge, Business Insider etc. When I was looking at my feed, I often had hundred of unread entries. These days I have slimmed down my “information diet” to higher quality sources like top blogs. I also pay for the Economist, WSj and FT. Everyone need to find out what works best, but for me selected high quality sources work best. For me, Twitter for instance is mostly noise. The good parts of Twitter usually find their way around the web via other sources, so no need to be there. And I almost forgot: Just ignore all the professional “Doom prophets”. 
5. Writing in English broadens the Audience
   Switching to English early on has clearly helped me to get high quality readers that I would have otherwise never reached. The price that I am paying is that my posts are not so elegant and full of mistakes as I am not a native speaker/writer and I have only limited time to fine tune my posts. But I still think it is worth it. For a “personal finance” blog a local version in German focusing on German specifics could make more sense.
6. Don’t feed the trolls and kick them out rather sooner or later
   For some reason there are always people who want to troll other websites. In most cases, discussions are useless and it is better to delete or “censor” comments rather earlier than later. Life is too short to waste time on this people.
7. Not every draft leads to a post
   In my WordPress tool, I have a total 245 unfinished drafts. That means around 15-20% of posts that I start are not getting completed. Often I start making notes on a company and find out pretty soon that there is something not to like. Or it takes me too long. Sometimes I start posts and finish them after a few weeks, sometimes something happens in between that makes the post less interesting. As WordPress is also my general notebook, this is no problem as I can easily retrieve the information
8. Limited communication channels
   Some readers wonder why I hesitate to discuss stocks that I have posted on the blog via Email. For me, the use of to many information channels is quite stressful. There is Email, LinkedIn, Whatsapp, the blog comments etc. etc. So Blog content should be discussed on the blog so that I can manage this kind of communication efficiently and to have the information in one place. Of  course anyone can send me an Email with regard to other topics, but I only have limited time to answer in detail and I will not answer on stuff that doesn’t interest me (Crypto tokens for instance).
9. Blogging can be a good way towards an investment career
   I know at least a handful of bloggers who created an investment career from blogging or where the blog helped them to start an own fund or get on the radar of investment firms. There is no guarantee and it needs time, but it is an interesting way into the industry. I got some interesting offers myself, but as I mentioned, I am very happy with my day job
10. However Investment blogging itself is not a business
    Although I didn’t try it myself, I think it is really hard to make a living from (investment) blogging. Maybe if one uses additional formats (Youtube) etc. there is a little chance, but otherwise I don’t know anyone who really can live from investment blogging. Clearly there are paid newsletters that work but that is another format in my opinion. 

And as a final Bonus my 10 favorite book reviews from the last 10 years:

1. Merger Masters 
   A “must read” for anyone interested in special situation / M&A Arbitrage.
2. A Man for all Markets – Edward Thorp
   Great auto-biography of the very under appreciated “early Quant” Ed Thorp who, among other things, “broke” Blackjack and developed the Black-Scholes option formula on his own for his fund.
3. Venture Deals
   The bible for anyone interested in how start-up funding works.
4. Shoe Dog
   Very entertaining “How I did it” Story from Nike founder Phil Knight.
5. The Shipping Man
   Very entertaining half-fictitious book that cured my from anything that has to do with shipping.
6. Poor Charlie’s Almanack
   A “Best of” Charlie Munger book.
7. Value Investing – from Graham to Buffett and Beyond 
   The best book on value investing. For beginners: Read this one first. I didn’t unfortunately.
8. Charles Schwab – Invested
   Charles Schwab is a very successful business man but also shows a deep understanding of stock markets. The book included a lot of concentrated wisdom on investing on top of an incredible business story.
9. Digital Gold – Bitcoin
   If anyone wants to understand Bitcoin and where it comes form, this is the book.
10. The Outsiders
    An important book on the art and science of capital allocation within a company.