The JakilaTheHun Value Investing Invasion!
An Offer to TMF
I am a man of many ideas. A lot of those ideas deserve labels like “crazy”, “insane”, “borderline ridiculous” and “otherworldly demented”! Yet, the most successful ideas of our time have also happened to be some of the craziest. If at least a sizable portion of the population doesn't think you're nuts or that your doomed to failure, you simply haven't come up with anything truly innovative. The “crazy idea” of today is often the accepted norm of tomorrow. And wouldn’t you know it … this blog is about one of those crazy ideas!
You see my fellow Fools, my "crazy" idea is for an investing web show right here on Motley Fool. One that will put CNBC to shame! There are a lot of reasons to believe this show could work. I've got the equity analyzing skills and TMF has most of the resources in place already with Fool TV, so I believe a little bit of hard work, we could create beautiful, world-conquering babies! (Don't worry, there are no more terrible mixed metaphors in this blog.)
Let this blog stand as my "crazy" offer to TMF to do a value investing program.
But first, let me set the background and my reasoning for wanting an investing program.
TMF or Cramer?
On a basic level, I believe the aims of Jim Cramer and Motley Fool are the same. Both TMF and Cramer want to teach investing to the average investor. The target audience is not hedge fund managers or investment professionals; it’s your regular Joe with a 401(K). In order to reach out to this audience, both TMF and Cramer try to make investing a bit more fun and interesting.
The major issue with Cramer is that he changes his mind every three weeks. He’s not a value investor or a growth investor – he’s a “momentum investor” who tries to predict the market’s swings. As TMF writer Nick Kapur argues in his article, “Why You Shouldn’t Listen to Cramer”, Cramer is essentially a weatherman. I question whether Cramer impacts any vital knowledge to his viewers, either, as he mostly just gives “buy” and “sell” recommendations with very little analysis. Essentially, he sets himself up as an expert to be followed, rather than empowering his viewers by sharing knowledge about how to analyze companies.
Don’t get me wrong --- I don’t dislike Cramer. I see his mission as a noble one. I merely question his effectiveness. That’s where my web show idea comes in --- I believe it would be great to have a show targeted at the average, small investor that entertains, while actually teaching investing fundamentals.
Grape Juice and Hugh Hendry
Like all crazy ideas, mine has a story. You see, my idea for this show came from a blog comment by TMFRhino about having a "hankering for grape juice." In one of my recent pieces, I analyzed Ruddick Corporation, parent company of regional grocer Harris Teeter. I made a random comment about how much I loved many of Harris Teeter’s store-brand items, particularly emphasizing the sheer awesomeness of Harris Teeter-brand grape juice! TMFRhino’s joking response to my blog put a vision in my head, of a show that was both silly and educational.
There was also another inspiration for my idea. A lot of you Fools out there love Hugh Hendry. One of my friends recently linked me to a YouTube video of Hugh Hendry in China. Hendry somehow manages to be serious and amusing at the same time. Maybe that’s why I like him. I’m the same way. So why not combine my ability to make ridiculous comments about grape juice and my ability to analyze financial statements from a value investing perspective?
Which brings us to …
The Jakila the Hun Value Investing Invasion!
"In his role as a Hunnish barbarian, Jakila The Hun conquers the investing world with a deep value orientation! Through grueling financial statement analysis, he attempts to find the stocks with the most favorable risk-reward prospects. Yet, he finds himself with a yearning to help teach all my fellow barbarian tribesmen the secrets of infiltrating the Roman markets with a careful, prudent investment approach."
“The Jakila The Hun Value Investing Invasion” (or TJTHV-double-I Show for short) is a show about fundamental analysis. The basic premise behind the show would be that I would visit businesses that I have recently written about from an investing perspective. I would explore the businesses and see what they were all about. For Ruddick, I might go shopping and showcase some of the things that one might buy at the Harris Teeter and the reasons why people might prefer shopping at it. I might do a few interviews with some of the employees, as well.
There would most certainly be at least one scene with me triumphantly purchasing the Harris Teeter-brand grape juice (that’s how TMFRhino’s comment fits in here). For that matter, I think a large chunk of the show would be unadulterated silliness. For example, for another episode of the show, I might visit mall retailer, Hot Topic (HOTT) and interview random teenagers, asking them questions like, "why do you think all the Gothics shop here?" and "how do you think I would look in this pair of hot pants?"
One benefit with the format of the show is that many companies would probably be very receptive since it would showcase their operations and provide more exposure for potential investors. In a way, it’s like free advertising for them. But it would also be a very unique service, because most investing programs don’t really focus on the nuts and bolts of particular businesses; nor do they really analyze companies from a customer perspective as companies are typically treated in a very abstract way in the investing media.
Then There Will Be EQUITY ANALYSIS!
As I mentioned, there will a great deal of silliness in this show, but it’s not all silliness. The show is about value investing at its core. So in every show, I would give viewers pointers into the WONDERFUL WORLD OF EQUITY ANALYSIS!
One recurring gag for the show is that I would always be finding giant financial statements lying around. So let’s say I’m in the Harris Teeter and while I’m in the frozen foods aisle, I find a giant Balance Sheet conveniently sitting there. I use the conveniently placed Balance Sheet to explain the concept of “Net Tangible Assets” and how one would go about calculating it on a per share basis. I might explain why I prefer Price-to-NTA over Price-to-Book and P/E ratios, as well.
In another segment, maybe I come across a giant Statement of Cash Flows in the produce section and explain the importance of “cash flows”, the difference between “operating cash flows” and “free cash flows”, important items on the cash flow statement to look at, etc.
I believe CAPS pitches here at TMF, plus my (not terribly entertaining) equity analysis pieces on Seeking Alpha give some insight into my analytical techniques. I do believe that my methods are teachable and the average person without much investing expertise could slowly learn most of these concepts.
While I believe most investing shows focus on individual stockpickers making stock picks, my primary goal would be to empower viewers to make their own decisions. Hence, while I would obviously mention some of the stocks that I particularly liked, the focus would be as much on the methodologyas the picks.
For Fun and Profit!
Of course, no idea would be complete without explaining why it’s practical and … uhmmm … profitable idea. You see, as it turns out, people often like ideas, but they tend to like them much less when it turns out that those ideas cut a giant hole into their pocket.
Motley Fool is a relatively unique company. I don’t believe their business model is comparable with most of the investment-related media such as the Wall Street Journal, CNBC, and Bloomberg. Rather, if you asked me to name a “similar business”, my response might be somewhat of a surprise --- the satirical newspaper, The Onion!
Even if their content is fundamentally different, Motley Fool and The Onion have a lot in common. Both are smaller, Internet-driven media companies that cater to a certain niche audience. Both rely on the Internet and print media for their business model. Both have a fun culture and the higher-ups pride themselves on being companies that people want to work for. Both have done a good job promoting and protecting their brand.
The reason I bring up the Onion is because I believe the Fool could develop something similar to the Onion News Network. For those not familiar with the Onion News Network, it’s sort of like the Daily Show, in the sense that it’s “fake news” and satire; but unlike the Daily Show which has more of a talk-show format, the Onion News Network tries to mimic the pretentiousness of the 24-hour news networks like CNN and MSNBC.
The Onion News Network is noteworthy because they broadcast over YouTube and sell advertisements in order to fund their operations. Since the Onion is not a publicly-traded company, I do not know the details behind their revenue picture or their profitability, but the webcasts have a significant advantage over most Internet-driven content in that the advertising is more similar to television advertising, and hence, has a higher value.
The other benefit of my show design is that it wouldn’t be prohibitively expensive. What would I need? First and foremost, a camera operator. Other than that? I would definitely need someone to create my giant financial statements, but that shouldn’t be too costly. The show would also need some production and someone to sell advertising, obviously, but I believe it would be rather inexpensive to produce compared to most television and web shows. Plus, the Fool already has this stuff on a basic level with the current “Fool TV” segments.
The Fool Network?
Personally, I view CNBC as television at its worst. It manages to be both sensationalistic in its presentation and mindless its ‘go-along’ tendencies. It provides little added value to investors, and indeed, CNBC tended to favor having on some of the most absurdly bullish investors as guests back during the bubble (while only occasionally providing any dissenting voice). Bloomberg is admittedly a bit better, but I believe the target audience for Bloomberg is much different than the target audience for the Fool.
Of course, there already is a “Motley Fool Network” on some level. For those who have never encountered it, the Fool occasionally runs video articles under the label “Fool TV”. Not only do I believe my show idea could work for the Fool, but I believe the Fool could slowly move into providing a fuller programming line-up and being an alternative to CNBC and Bloomberg. Of course, I don’t claim that a TMF Network/Fool TV would ever be as big as those two; that’s why I’ve presented the Onion News Network as a model. Sometimes, in order to think big, you’ve got to think small.
Could a TMF Network be successful? I don’t see any reason why it couldn’t. While I’ve pitched the idea for my “Value Invasion” show, there are a lot of things that TMF could potentially succeed with producing a few investing shows. One idea I’ve always liked is having an investing show that is structured in a similar way to ESPN’s Around the Horn.
While it’s true that Around the Horn has a completely arbitrary scoring system and isn’t meant to be taken seriously, I like the format of having four panelists offer their opinion on a particular topic. For an investing show, the usual topics would be individual stocks selected for that particular day. The panelists could be current TMF writers/editors, well-known figures in the investing sphere, and possibly even highly-rated CAPS players who had proven their worth.
So that’s another example of content that Fool TV could provide. I won’t sit here and churn out a dozen programming ideas, but the general takeaway is that a Fool TV, modeled around the Onion News Network could be quite a good investment for TMF. If the Onion can do it, why not Motley Fool?
National Crazy Idea Week
Early yesterday morning, I made myself a promise. I had felt as if I had not been productive enough the week before and I wanted to make something happen this week. I’ve had a lot of ideas kicking around in my head lately and just hadn’t put the work together in making them presentable for an audience. So I decided, that I would declare this week “National Crazy Idea Week.”
Right now, I’m the only person celebrating it, but I urge you all to go out there and pursue your dreams occasionally. The worst that can happen is that people can laugh at you and call you an “idiot” and a “failure”! Sure, that sounds bad, but it will motivate you to succeed even more, so it will be good for you ;)
For me, this was idea #1 on my list. If given the opportunity, I believe this could be a great success. And hey, if you don't like this crazy idea, I have others!
Next crazy idea on the itinerary --- to get a one-day internship shadowing a CEO of a major REIT! (It seems like a good way to learn more about the industry.) I'm working on that one tomorro.
So how about it, TMF? How ‘bout the TJTHV-Double-I?! Give the Jakila the Hun Investing Invasion a chance on Fool TV! Whatd’ya got to lose!?
If nothing else, this blog was fun to write. Nothing is as thrilling as presenting a crazy new idea to strangers. And a guy can dream, can't he? But maybe we can make this dream a reality. Maybe this is the long-shot that pays off :)
- Jakila the Hun.