P&I's judges reviewed more than two dozen financial blogs, rating them on timeliness of postings, quality of writing and insight, use of pictures and video, success at generating comments from readers and whether the blog is fun. Judges could make general comments about the blogs, too.
But beyond ranking blogs, P&I sought to find out whether money managers — news junkies rarely without their BlackBerry — use blogs.
Turns out some tout the virtues of having fresh and sometimes entertaining voices and unique perspectives not found in typical Wall Street research, while others eschew blogs as unnecessary.
For the uninitiated, “blog” is short for “web log,” a sort of diary that's posted online. Blogs have carved a niche in publishing through their independence (anyone with access to a computer can write a blog), informality (many border on “info-tainment”) and immediacy (publication and response come at the touch of a key).
At The Big Picture, Mr. Ritholtz writes the blog largely for himself. Borrowing a quote from Daniel J. Boorstin, noted author and long-time Librarian of Congress, he said, “I write to figure out what I think.” And there's the practicality of the blog as “indexer”: “I post (a news story or research paper) here ... and I can find it anytime I want.”
Some money managers find those thoughts and postings helpful.
Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc., Cincinnati, said he looks for things that stand out while reading every day. Good blogs will condense the valuable points from mainstream media. “It's like Cliffs Notes,” he said.
Some see blogs as complementing — if not competing with — Wall Street research. Gunnar Miller, managing director and global co-head of research at RCM Capital Management LLC based in Frankfurt, Germany, said blogs' advantage, especially the independent ones, is that they may contain thought-provoking information not available elsewhere.
For example, one blog that Mr. Miller's team has followed is the Irvine Housing Blog. “I learned more about the (U.S.) housing crisis from the Irvine Housing Blog than (from some of) the high-priced broker reports,” Mr. Miller said. “What may be unconnected, seemingly unimportant facts at first, can be used to build a mosaic that becomes quite valuable.”
Mr. McCormick agreed, saying blogs can provide “additional information to support your investment hypothesis.”
“(Blog information) gives you a way to add more color to your understanding,” Mr. Miller said, “and can allow for an efficient way of putting your ear to the ground.”
But as with any sources of information, sound judgment is needed to vet the content, managers said. “You have to consider the source and approach the information with the requisite skepticism that you would have with anything else,” Mr. Miller said.
“Any investment I do, I do my own (research work),” said Ken Karwowski, high-yield bond portfolio manager at Allegiant Asset Management Co., Cleveland, with $30.7 billion in assets under management. Mr. Karwowski reads [email protected] (www.wellington.weedenco.com), a subscription-based site.
Mr. McCormick, who said he's “somewhat suspect of Wall Street research,” said the mordant spoofing at Dealbreaker (http://dealbreaker.com/ and bronze-medal winner in P&I's Best Blogs competition) makes the blog one of his favorites. “Most times, these are rather boring subjects,” he said. “It doesn't hurt to have a little entertainment thrown in there.”
And Dealbreaker throws in plenty of entertainment. Dubbed “A Wall Street tabloid,” Dealbreaker riffs on financial news and newsmakers, with Editor in Chief John Carney and Contributing Editor Bess Levin writing most of the content. Consider Ms. Levin's recent description of the investment banker dating scene, where she introduces “Ms. Junk Bond”: “She's not looking for any long-term investment, but she could offer a mind-blowing weekend in Maui, as long as she doesn't pick up the tab. There is no middle ground with these types: They enjoy either the high-flying adventure or nothing at all; they come with a price. If their partner slips up in any way or ceases to perform, she will immediately default, leaving a trail of broken hearts in her often destructive path.”
But others say blogs can be skipped. “Most financial blogs are not very useful to me,” said Jonathan Naimon, co-founder and president of Light Green Advisors LLC, Seattle, an asset management firm with $58.9 million under management that specializes in environmentally sustainable investing. “The financial ones seem to be touting whatever stock they bought that day,” he said, adding that he is more likely to read political blogs, particularly The Huffington Post (www.huffingtonpost.com), a site that features an assortment of left-leaning bloggers and commentators.
“There's just so many hours in a day,” said Keith Black, associate at investment consultant Ennis Knupp & Associates Inc., Chicago.
He said the “network effect” hasn't spread to blogs, meaning that if someone asks him about a blog post, he'll go check it out. But if someone asks him if he's read a certain article in the Wall Street Journal, “I'm embarrassed if I (haven't read it).”