Blogging for Fun and Profit

Why blog?  For many people the answer would seem to be that they blog to bring attention to themselves and their business; they blog with the idea that it will help them to make money.

I started blogging just about a year ago. It began at the suggestion of the editor of my book.  She advised me to start a blog to help get my name out there and sell the book. Blogging is free, she told me, and I had no budget to promote the book.  I receive nothing from the proceeds of the book, all of which go to cancer research.

She also advised me to publish the blog on Linked-in, rather than Facebook where she thought more “serious” people would see it. At the time, I knew very little about either writing or publishing and I willingly took her advice. If I am doing something that I have never done before, I always hire someone who knows what they are doing or seems to know.

The blog follows the basic theme of the book. Its avowed purpose is to call out “foolishness” in the mainstream capital markets. There is certainly enough foolishness to go around. Much of what I write is a reaction to what I see or read elsewhere.  Many of the articles were inspired by conversations that I have with friends or strangers.

Because I write about foolishness in the financial markets, several articles have gravitated to two subjects, Robo-advisors and Crowdfunding.  Both are championed by fools who put a lot of bad information into the marketplace.  I try to counter that bad information with reason.

Robo-investing is foolish because it cannot work.  If you invest with a Robo program you are guaranteed to lose money when the market turns down.  Automated trading programs have been around in the commodity markets for a long time and are universally rejected by regulators and people who understand that a computer program cannot predict the markets.  If you are not investing to make money and are happy to lose, then in my mind, you are foolish.

Robos-advisory programs have become big because they eliminate the most expensive part of the investment transaction, the human advisor, which leaves much more profit for the firm that is offering the program.  A theme of the book, which carries over to Robos is that if the financial industry offers a product it is more likely than not designed to make money for the industry not the investor.

I get a little pushback from the Robo industry when I write negative articles about it. A number of people who contacted me after one article in particular, told me that whatever I thought about Robos, human advisors were terrible. In my experience not all investment advisors are terrible. I responded by inviting people to contact me for the name of my advisor who is very intelligent, competent and hard working and who gets good results for his advisory clients because of it. A few people took me up on my offer and seem to be happy to be working with him.

I get a lot more pushback when I write negative articles about Crowdfunding. I personally think that Crowdfunding has a lot to offer for the companies in need of funding. Unfortunately the Crowdfunding industry is populated by many people with zero experience raising money for small companies. Much of the activity in Crowdfunding is people giving seminars to other people teaching useless information and patting each other on the back.

Pointing out that fact makes those people very angry but it does not change the fact the Crowdfunding industry is remarkably unsuccessful at raising money. It takes money to raise money. The Crowdfunding industry is busy telling people just the opposite; that an inexpensive  social media campaign is all a company needs to successfully attract investors.

Many companies who try Crowdfunding do not get the funds they want. That is a shame because it really is not that difficult for a good investment to attract investors.

There is a very small group of Crowdfunding platforms that close every offering that they list. The people who run those platforms don’t give seminars because they are too busy being successful.  Several are run by people who came out of the mainstream financial industry and understand what works and what doesn’t.

One of the reasons Crowdfunding is failing is because not every company that wants to be funded is a good investment.  Early on I offered to read any company’s pitch deck and make comments for free. That has brought me into contact with a fair number of entrepreneurs, most of who I have found to be quite interesting and appreciative.

I also write about the markets themselves, especially regulations of the markets, FINRA and FINRA arbitration.  If I write fewer articles about these subjects it is because there are a great many lawyers and others who put out good information. The mainstream securities industry is usually careful to stay within the regulatory white lines.

So has blogging been good for my business?  Yes, but in unexpected ways.

Blogging has certainly gotten my name “out there”.  When I started the blog I had about 200 Linked-in connections, mostly friends, colleagues and former clients.  I add new connections with every article and the number has increased 8 fold and continues to increase weekly with each new article.

My articles on the investment industry got me the opportunity to write articles for a mainstream digital publication serving the investment advisor market. Some of those articles reach thousands of readers. I am still very much at the Jimmie Olsen, cub reporter stage but the editors there have been very patient and supportive.

The articles on Crowdfunding, especially the negative ones, put me in touch with a several groups that want to do Crowdfunding correctly, with due consideration to what investors want and deserve.  I have been helping these Crowdfunding platforms move from the planning to the implementation stage. Each shares a goal of funding every company that it lists. I expect that other groups seeking to start Crowdfunding platforms or make existing platforms more successful will seek me out as well.

The articles on arbitration and market regulation have resulted in a few expert witness gigs in FINRA arbitrations and a consulting assignment for one of the larger Wall Street investment banks. I suspect that more will come.

The best part of blogging has been that it has put me in touch with a large number of people with whom I would not otherwise have been in contact.  I speak to 2 or 3 people every week. Some of those conversations go on for an hour or more.

During most of the conversations I find myself laughing over a good joke or comment.  For me it is these personal connections that are the best thing that comes from blogging.  A good laugh in the middle of the business day seems harder and harder to find.

 

 

 

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