財經觀察 1844 --- What Ritholtz is About

Interview with blogger of "The Big Picture"

What Ritholtz is About
(bettertrades) - We get an inside scoop from the writer of one of the most controversial, most distinguished, best designed blogs on the web today. While most people tend to want all the answers sugar coated and handed to them on a silver platter, they may not be prepared for the big picture that Barry Ritholtz provides. He digs in, and lets you have it. Be advised, the following interview is in the authors own words and contains mature language that may not be suitable for children, or the weak hearted. Parental Discretion is advised. On with the interview!

(interview with Ritholtz) -
How long have you been blogging?
About 5 or 10 years, depending upon your definition.
From a weekly email, I eventually moved to Geocities around 1998. That was kinda blog-like. I started ?blogging proper? over the Summer of 2003 ? I was a beta tester for Typepad. In late 2008, I moved to my own domain (Ritholtz.com) and Word Press.

What got your started blogging?
Its kinda funny ? I originally wanted to access my most recent version of written work. Between the office and laptop and house, I always seemed to have an older version of whatever I was working on. It also find it a convenient way to track/bookmark certain pages and articles.

I was very much surprised when an audience showed up.
What is the focus of your blog, i.e. how does it set you apart from the other bloggers out there?
My focus is whatever interests me. I mean that quite literally ? if I find it intriguing, it ends up on the blog. So while there is a lot of sophisticated, high level analysis and commentary, I also drop in lots of asides about cars, movies, music, gadgets, concerts, etc.

I think the combination of markets, economics, investing, and technology is what appeals to people -- then the personal stuff lets them get to know me.

Its not a conscious marketing thing . . . I merely scratch whatever is itching.
What is it you hope a reader will come away with when they visit your blog?
A few things: A better understanding of the state of the markets and the economy then the official Wall Street / Government spin they get; A recognition that you have to go beyond the headlines to the actual data. Third, and no pun intended, but a sense of the big picture ? the 40,000 foot view that lets you see how all the separate moving pieces fit in together.

Do you like to be edgy in your posts and try and stir up some controversy?
I work in an industry where bullshit and spin and thievery and outrageous behavior are tolerated. I don't think this controversial, it just is. Merely pointing this out is considered by some to be outrageous.

One of my personal beliefs is that you tell unvarnished truth and let the chips fall where they may. It's a variation of ?Fuck ?em if they cant take a joke.? There's plenty of mealy-mouthed superficial commentary out there. That some of my stuff is even considered edgy or controversial only reveals how milquetoast most market commentary and economic criticism actually is.

Some of the media comments about the blog have been incredibly gratifying ? things like ?a counterweight of rationality to the typical ravings? are exactly what I am aiming for.

What do you think about bloggers who have this kind of approach
Being controversial for its own sake is meaningless. Substance must trump style. Look at some of the worst, money losing commentary of the past few years ? Ben Stein, Don Luskin, quite a few others. I do get the sense there is an attempt to be controversial for publicity's sake ? the problem is that the political hacks and perma-bull's advice utterly destroyed the investors who listened to it.

Do you think it being edgy gives you a boost in subscribers?
I would hope people are coming to the site to gain access to things they cant find elsewhere.
When did you start to trade?
I began in the industry as a trader in the mid 1990s.
What is your favorite instrument to trade (stocks, options, forex, futures, bonds, etc.)
Equities and Options
What is your favorite strategy to trade?
My favorite is the very rare panic collapse. We were big index buyers on October 10 below Dow 8,000. I?m annoyed at myself that we didn?t load up on calls for a quick home run. Even still, we managed to pick up 27$ in a few weeks.

What time frame do you like to trade?
ALWAYS open ended. If its still working out, we let it ride. ALWAYS.
For someone new coming into the markets, what steps would you recommend they use to get started?
Start small, manage your losses, look at what you are doing and how it fits into the broader cycle. Make sure you learn something from every trade, winner or loser.

Read vociferously. Learn constantly.
What is the biggest stumbling block you see for most beginner traders, i.e. where do you see them making the biggest mistakes?

Their own brains get in the way. Stop thinking like a scared primate, and instead think like an alien visiting earth. Look around at the emotional monkeys around you, giving into their worst instincts. All that money is lying around, waiting to be picked up by someone without that wetware getting in the way.

In today's trading environment, where do you see the biggest opportunities for traders?
In this environment, there is a real opportunity for the truly talented to shine. Look at some of the new names who have been hitting the cover off the ball. Anyone can make money in a bull market, but this has really separated the men from the boys. Some very well known managers and traders have been unmasked as plain lucky or leveraged bull market bums or just plain old fools.

We found that having a technological edge is a must have in this environment. We eat our own dogfood ? we use the FusionIQ quant product in all of our stock picking and asset allocation. It has made us much better traders and money managers.

What do you see in store for the markets in 09?
More economic weakness, no recovery in 2009. Earnings will be awful. This is likely to be a 3 year recession at the least.

If a turnaround, when do you see that happening?
Economically? Late 2010 if we are lucky.
Marketwise, as we get oversold enough, as things get really cheap, that's where you can aggeressively buy. But we are not quite there yet.

If not a turnaround in 09, why not?
One word: Earnings.
At a 15 multiple, a $50 SPX earnings for the year only gives you an S&P500 price of 750. But as we have seen, during Bear markets we do not merely mean revert, we blow thru the historic averages for P/E to much lower levels. Do the math on a 10X multiple on $45 or 50 dollars in earnings; its not very pretty.

If not a turnaround in 09, when?
2010-11
Do you use technical analysis?
We use every tool that we can demonstrate has a predictive value in terms of positive alpha (returns) and risk management

If yes, what are your favorite technical indicators?
Ahhh, you?ll have to wait for the book to come out for those!