At www.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 Wade Slome at Investing Caffeine. Mr. Slome has worked in the investment industry since 1993, and he has been seen on ABC News, and has been quoted inThe Wall Street Journal, USA Today, The New York Times, Dow Jones, Investor’s Business Daily, Bloomberg, Smart Money and other publications. He is also a CFA charterholder, a CFP® certificant and a member of the CFA Institute and the FPA® (Financial Planning Association). We spoke to Wade about the similarities between investing and religion, the lack of wisdom behind conventional wisdom, and the potential benefit of a hypothetical CNBC show called “Slow Money.”
EQ: What inspired you to start Investing Caffeine?
Slome: I started five and a half years ago. My goal was to provide a fresh, unique voice in the crowded investment commentator space. The way that I look at the world of investing is that it’s a lot like religion. There are countless religions and there are a countless number of investing styles. You talk to any one of these investment bloggers, and the vast majority of them – myself included – all think that their investment style is the way to reach financial nirvana. Of course, there are many different ways to skin a cat, and many ways to make a profit. I don’t pretend to be the only answer, but as it relates to Investing Caffeine, my main goal and the way I structure all my articles is geared towards educating investors to take more of a long term investing approach.
Another goal of mine is to highlight misperceptions, because so often, news media tends to all write a story one single way. In my view, all these bloggers, journalists, pundits and media outlets are basically regurgitating the same headline – just like a weatherman who looks out the window and reports whether he's seen rain or sunshine. For me the more interesting question is to ask “What are the implications of that weather?” So, most of these articles are completely irrelevant. It’s easier said than done, but in my blog I’m try to divert people's attention away from the daily shiny object and try to direct them more towards the genuinely important driving factors.
EQ: What would you say is the main factor that differentiates Investing Caffeine from other financial blogs?
Slome: First and foremost, my aim is to make dry, complex investment concepts more accessible to the masses. I try to use a lot of metaphors to make it more digestible to a broader audience.
For example, in my most recent newsletter I used Thanksgiving turkey to describe P/E, price to earnings valuation ratios. All too often financial industry professionals use flattery, jargon and acronyms basically just to sound smarter.
EQ: Do you have a long term goal for blogging?
Slome: I don’t have any single, massive long term goal, but the main focus for me is to try to get people to think longer term, like Warren Buffet, rather than a short term trader like Jim Kramer. CNBC, which I admittedly watch, would be doing the public a huge favor if they aired a show called “Slow Money” rather than a show called Fast Money.
It's not really going to drive the advertisers, so it's probably not a real exciting concept, but regardless, if you step back and look at the pace of trading, the fact is that investors of all stripes, not just professionals and individuals, are becoming more and more myopic. So, rather than owning stocks for 10 years, investors today might own a particular stock for 10 months. Buffet and other great long term investors benefit from the powers of compounding. They're not taking their fishing pole in and out of the pond. They’re keeping it in there. That is how you're going to build long term wealth. The main goal is just to try to give readers and investors a longer term approach to investing.
EQ: What sort of stocks or investments do you find interesting right now?
Slome: At my firm Sidoxia Capital Management, we're looking for market leading franchises that can sustain above average growth rates. I’ve personally been investing in growth companies for more than 20 years. I’ve been steeped in that growth area, and that’s where we’re primarily focused. Currently, we're finding a lot of attractive opportunities in technology, healthcare and energy, even though we invest across the board. Those are some areas, and more specifically, some of the things that we're investing in include robotics, mobile applications, medical devices, electric cars and the smart grid.
EQ: Do you have a specific philosophy or piece of advice that you'd like to impart to our readers and readers of Investing Caffeine?
Slome: Basically, conventional wisdom is often wrong. And if it isn’t wrong, the prevailing beliefs are usually misleading or detrimental for long term investors. The best investors that I follow are not following the herd, but instead use independent or contrarian thinking to their advantage. That is a good piece of advice for everyone.
EQ: Since you started Investing Caffeine, have you noticed changes in the financial blogging landscape?
Slome: I think it's definitely changed, and you know as well as I do that social media has exploded the distribution of financial content. Twitter has been a huge facilitator of the trend. Depending on how you use it, Twitter can be an incredibly useful tool, but at the opposite end of the spectrum it can be a massive time sucking black hole. If you do use Twitter, I encourage everyone to use it responsibly. Rather than sifting through the avalanche of minute by minute streaming tweets, I prefer to create a short list of thoughtful bloggers that I periodically read and check in on their content. There’s a lot of garbage blogging going on, but if you spend some time filtering through it all, there are some amazing blog gems out there.
For more information on investing from Wade Slome, please visit his blog Investing Caffeine, or Sidoxia.com