At equities.com, we’ve always been focused on building an active community among the leading voices within the world of finance. However, as with many other fields, in recent years, we’ve noticed a significant shift away from traditional sources of news, tips and predictions and toward the growing number of financial bloggers.
In this series, we profile some of the most distinct and noteworthy voices in the world of financial blogging. Here, you’ll find our recent interview with Todd Sullivan at Value Plays. Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners who looks for investments he believes are selling for a discount to their intrinsic value. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. Read below to learn what led Todd to start financial blogging, his thoughts on the shift into the mainstream of finance bloggers and the importance of ignoring finance headlines.
EQ: What inspired you to start Value Plays?
Sullivan: I always journaled my trades. I was reading Seeking Alpha in 2006 and sent some thoughts to the editor at that time. He replied back to me that he thought they were good. I guess it was easier if he just sent me the link to my blog and he could just take the information from that so I wouldn’t have to email him every time. At which point I said to myself “Well, what’s a blog?” I googled it and started writing stuff online on the old Blogger Platform in January 2007. That’s how it started, and it kept growing from there.
EQ: You seem to update the blog pretty regularly.
Sullivan: Yeah, typically, at least once a day, sometimes as much as three or four times a day, depending on the time of year. There is usually a lull around earnings and then maybe two, three or four earnings reports might be released all at once. So, there are quiet periods, then there is a flurry around earnings time that might continue for a few weeks, and then it lulls back.
EQ: There is no shortage of financial blogs these days. What sets Value Plays apart?
Sullivan: Basically, I’m not a trading service. I have some holdings that I’ve held since inception of the blog and even before that. I just continue to hold these stocks, and I update regularly about the outlooks and earnings of the stocks. It’s not one of those high turnover, one trade a day or one trade a week blog. It’s really buy and hold. It’s buying deep value opportunities in special situations and seeing them to fruition, whether that is six months, one year or four years.
For instance, I still hold some of the stuff I bought in 2008 and 2009. I don’t have any intention of selling unless the fundamentals change. I don’t think there's a whole lot of blogs out there that do that.
EQ: That’s true. Most of them seem to focus on making easy money as fast as possible. Do you have any long term plans for the blog?
Sullivan: Well, there’s a subscription option for the blog, and I’m doing well with that. I just want to keep growing the subscriber base. As long as it keeps growing and doesn’t stagnate, and as long as it continues to be an outlet for my natural fascination with the markets, then I don’t have any intention of doing anything with it. I guess someone might it offer to buy it someday, but I never really thought of it that way. I’m perfectly happy to continue what I’m doing here for quite some time.
EQ: What stocks or investments do you find particularly interesting right now?
Sulivan: My favorite stock is Howard Hughes Corporation, (HHC) . I think that is drastically undervalued company. It’s probably worth at least twice its current market cap, and I think it will realize that value pretty quickly over the next year or two. My most recent buy is Callaway Golf Co. (ELY) . I think that's got some significant assets that aren’t appreciated by Wall Street and probably aren’t even known, for that matter. Based on the CEO’s history, I think they’ll monetize those assets. When they do, they'll see a pretty quick price increase. I think they'll do it this year.
EQ: Is there any single piece of advice that you'd want to impart to your readers?
Sullivan: The one thing I always say to my readers is to ignore the headlines. Headlines are meant to excite people, meant to incite people. They’re not meant to inform people. We went very long housing in 2010, 2009 where people were saying housing is never going to come back. It has been a very profitable trade for us over the last four or five years.
It’s also important to look at the data and do your own research. Don’t just read an article and make an investment decision, or form an outlook based on an article, because you dont know the bias of the person running the publication or writing the article. I don’t think you can make accurate assumptions. Maybe use it as a reason to initiate research into something, but don’t let it dictate your actions.
EQ: You started Value Plays at a time when financial blogging was still very new. Have you found that the landscape for financial blogging has changed since 2007?
Sullivan: Yes, significantly so. I think bloggers have gone from sort of this being disdained by the mainstream media when we first started to becoming an accepted, if not the preferred mode of communication. For a while, you would hear “Who are these people? They’re not working for a big media conglomerate. They must not know who they're taking about.” Today, though, most everyone in mainstream media has a blog.
If you’re willing to dig for it, you can find information in the blogosphere that trumps anything that you’ll find in the mainstream media. They obviously have the affiliations and contacts to get a nice quote and rapid information, but I think some of the most in depth stuff you'll see out there is in the financial blogosphere. I think that is only going to get larger as time goes by, which is a great thing. It really has democratized information and investing for millions of people and I think that’s fantastic.
EQ: It's an example of the markets at work, in a way.
Sullivan: Yes it is.
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