Posts for Tag: Profiles

Minyan Makes Markets Manageable

This is from a paper I wrote at the College of Idaho.

Minyanville.com made it possible for me to be conversant about financial issues. 

I remember discovering the site about two weeks into my first internship on Wall Street. I had been tasked with monitoring a status screen and told to continually read the news to help my own understanding. When I first started attempting to understand the machination of the Wall Street beat by reading the New York Times business section and Reuters financial news, I felt like I was drowning.  

My parents (both corporate finance geeks) had taught me phrases like EBITDA and revenue at a young age. My friends assumed I knew about these things, and would sometimes ask me questions about investment banking, trading, or business; assuming me to be an authority because I knew the names of more than five Wall Street firms.

I found Minyanville by chance, and found Todd Harrison’s writing there to be immensely helpful to my understanding. At first it was just his writing, but as I started exploring the site and tenaciously checking for updates, I found a collection of authors and thinkers who had devoted themselves to the craft of finance and were willing to share their experiences.

Imagine me, eighteen years old, essentially dropping in like a fly on the wall and listening to a collection of the “cool kids” in the finance world talk about their craft with one another and an audience of thousands.  I was fortunate to both sit down with and chat over the phone with Todd (Toddo) recently, and he shared with me some musings about both the reasons for Minyanville’s existence and the way that the general public interacts with the financial media.

The Minyanville approach of providing opinion rather than advice comes clear after I ask Toddo if anyone actually understands the financial machination. He responds “To understand where we are we must appreciate how we got here. So I think that looking at the probability spectrum of what could occur and communicating the risks and rewards to all of the scenarios within a probability spectrum and offering an opinion in the context that it’s just that (an opinion) is the greatest value add in the market place, as opposed to telling people what to do.”

Indeed many have long been critical of those who offer advice to random audiences rather than opinions. In person, it’s clear that Harrison believes there’s very little merit in offering advice over the internet, since there is absolutely no way he could know the risk profile of his readership. Further to the point of offering advice without information he offers “I think that’s endemic of the mindset that got us into trouble in the first place.”

Harrison offers that people should re-examine who they look to for their punditry, arguing that “Many of the pundits that people are looking to for questions on when we’re going to get out of this are the same people who didn’t see I coming in the first place.” This jives very well with a thought passed on by a friend in the asset management industry who offered that oftentimes, once people are validated as pundits in the media mainstream that it’s very difficult to get rid of them. Indeed pundits who offered up investment recommendations that failed miserably one month are often back the next recommending new investments with little accountability for their past failings.

On the subject of criticizing unaccountable pundits, there’s not much more I can offer. There’s already a closet industry built around criticizing CNBC. A point Toddo raises which I think is very thoughtful is that “There is a fair amount of culpability that extends throughout the societal spectrum. (It ranges) from the consumers who overextended on their credit to the financial institutions that engineered the markets to the policymakers who were complicit by acceptance to the CEO of the United States of America.” He adds “Nobody was asking questions when the screens were green.”

Harrison is hesitant to point out too bluntly that he and many other Minyans were asking questions when the screens were green. It’s been a good thing for me to have these guys as teachers, and to have their thoughts percolating in my brain.

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