Bite-sized video

By Felix Salmon
May 7, 2010

I’m experimenting with adding a bit of video to this here blog, do you think it’s a good idea? Here’s a couple of bite-sized snacks I recorded this afternoon: the first one’s on why it’s a good idea to get out of the stock market right now, and the second one’s on Greece, and how it’s a harbinger of other sovereign debt crises to come.

34 comments

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Like the video Felix.

Obviously you realize the US will devalue to get out of its debt though, right? Which is something the Greeks can’t do.

Posted by Kurt_Osis | Report as abusive

For the large number of people with over 20 years before spending the bulk of their retirement accounts, short-term volatility makes it a great time to buys stocks. The ups and downs will scare away the speculators and increase the equity return premium.

The real question is whether the world’s corporations will have higher earnings in 20 years than they do now. Many people are pretty sure that they will. And surviving the market swings in the mean time is not that hard, just don’t look at your statements.

Posted by Stevensaysyes | Report as abusive

Like the content; like the brevity.

Disappointed with the lack of sartorial brio after the Toronto videos.

Posted by BrianTimoney | Report as abusive

I was fairly sure this was a bad idea, but it was certainly better than I expected. More please.

Posted by Mr.Do | Report as abusive

The only way to avoid the risk of losing money is to have none. Everything can lose value, and the value of any one thing is dependent on the value of everything thing else, so even if what you have is a solid asset, it can temporarily lose value because other people may need or want to sell the same thing (much of the 08/09 crash was caused by people needing liquidity and having no other options to raise cash). Sell stocks now? And what, put everything in cash? Should it be dollars, which are at a high over the last few years? Euros? Can’t that go lower, since the market drop was precipitated by fears of a contagion? Yen? From the country that runs huge budget deficits? Or can we all buy renminbi, because China is definitely going to re-price it.

Rather than say sell all stocks, maybe you should only sell stocks you no longer believe in, otherwise you are just trying to time the market, and that is pretty hard to do.

Posted by OnTheTimes | Report as abusive

Kurt, the most significant debts are the implied obligations for Social Security and Medicare. Hard to “devalue” your way out of that one… Moreover, devaluation is a two-edged sword. It is hard to convince investors to accept near-zero interest rates (as they do now) if you have a history of defaulting through inflation. It would be a great solution if we were ready to eliminate our primary deficit, but we’re not.

My investments have been steadily trending towards short-term cash instruments and consumer stocks (with dividend yields of 3% and up). I believe the global consumer companies are more likely to keep pace with inflation than bonds, and the market seems to have gotten ahead of the recovery. I may lag rallies, but can sleep easy in declines (especially with substantial cash on the sidelines).

Posted by TFF | Report as abusive

I like the videos. Short and concise.

Please keep them that way.

Posted by lgg | Report as abusive

I read too much so this is good.
ditto keep them short & concise.

Posted by vv111y | Report as abusive

love it…..more

Posted by AtTheMargins | Report as abusive

Strongly against. Yes I’ve watched your samples. The information density/second is vastly lower than text. It’s unusable at work. However well you have prepared, the impression has to be that is is off-the-cuff crap rather than something you’ve spent even 5 minutes thinking about (because if you did put such time into it, why not _write it down_ with maybe some editing along the way?). You are not doing ANYTHING with these sample videos than showing your mug (which one picture achieves this ok) and lowering your reputation. Doing video offers a built-in excuse to lower your standards, but do you need this?
Speaking personsally and as a fan of your blog, you can be assured that if you ask me to spend 90 s..e..c..o..n..d..s.. listening [ok, in fact even more waiting till I leave work so I can listen] to hear what you would normally more accurately provide in <10s of reading (and more clearly, since that magic of editing works again), I'll just go away. Can't; won't; it seems just crazy.

Good content, but a long long long long way from being _that_ good that you should put such a silly an unreasonable constraint upon it.

Posted by bxg5 | Report as abusive

I wonder how this would effect your ability to communicate with toughness… Maybe it could be more effective, assuming you have the courage to communicate the same things with your mouth that you write.

Would you still talk about Goldman’s lies and take them to the woodshed if you had to say it, or would that feel too rude?

….

“You the ordinary person should not be in stocks” — extraordinarily elitist. It really takes a Brit to say something that elitist. Who are you to presume what someone’s risk tolerance is. This is America. The folks at Motley Fool would fire you out of a cannon, albeit a clown cannon so you would survive.

I would say, where should your assets be? Bonds, given the turmoil there? Cash, given the poor ability of any nation to pay its bills? Real estate, given what you’ve said?

Posted by DanHess | Report as abusive

I like the video too (especially for a blog), though you’re lucky John Authers isn’t doing his on the FT Short View anymore. Those were amazing. I admit, he had a whole team to back him up and run the analyses, which regularly came up with interesting insights.

Posted by Abulili | Report as abusive

Eccellente! Must be a good peformer at restaurant tables, too.

Posted by hansrudolf | Report as abusive

No talking head videos please.

Talking heads convey so much less information per minute it isn’t even funny. Save video for something other than just the recitation of something that should be a blog post.

Posted by patrickinmaine | Report as abusive

These should be especially helpful for your illiterate readers.

Posted by LadyGodiva | Report as abusive

On behalf of those illiterate readers I thank you. As an individual investor who has been doing this for a long time, I have no intention of getting out of equities. Just because Mr. Market is not taking to his new meds very well and his mood swings are becoming wilder by the day does not mean the value of what I own is fundamentally changing (although it may lead to events that do bring fundamental change in the economy).

Posted by wpw | Report as abusive

I may be old-fashioned, but I prefer text. You can make a much more tightly-reasoned argument in text. In a video, it’s more force of personality. There’s a place for that, but I’m not sure the place is in the information you typically communicate.

I have been thinking along the lines of getting out of equities, not because of volatility, but because I have begun to wonder if the game is rigged. I am not at all a conspiracy theorist, so I’m a bit alarmed that the thought has even occurred to me, let alone taken seriously.

Posted by Curmudgeon | Report as abusive

No offense felix. I respect your thoughts but the reason its dangerous to be in stocks right now is not because of the greek crisis but because of the panic being spread by people like you, jimmy cramer and roubini. What you should be advising people to do is not to over leverage themselves. People who are in stocks should be in them for the long term. The ones who should be getting out are the day traders. The reason we have large market fluctuations is because we have people yelling “sell sell sell” one day and “buy buy buy” another. If one believes in the US economy long term then there is no point in selling and waiting for an opportune moment to buy because we won’t know it.

Posted by dicktracy150 | Report as abusive

I like the video… and I like the written blogs… A regular combination of both would be my vote.

Posted by HopeButReal | Report as abusive

Thanks for advice, it makes a lot of sense to me. The last crash woke me up from the traditional dream that you just put your money in stocks and wait for it to grow.

Like the video addition to your blog by the way…

Posted by ashton0809 | Report as abusive

Vids are good. People at work might want your insight and do something else at the same time. It’s difficult to read and do something else but you can listen and do something else.

Although true multitasking seems near impossible you can probably catch some fragments if you’re half listening to somebody. If those bits and pieces sound interesting you can come back later and bestow your full attention.

Posted by EmilianoZ | Report as abusive

Felix – these videos are great. Really like how animated you are, and also enjoy the brevity in commentary. More please!

Posted by Uzairmk | Report as abusive

This advice is beyond idiotic. Leaving the market means timing the market, which doesn’t work. If you leave now you will miss out on the inevitable rally. Felix is not an academic but a braying journo who has picked up a few snippets here and there and thinks he’s an expert. Follow his advice at your own risk. Remember: journos are paid about as well as trash collectors.

Posted by UseIndexFunds | Report as abusive

I liked the video, but immediately looked further down this page to find the explanatory text. IMO you need both: video to summarise and get a quick overview, the text to elaborate and provide research backup details.

As for the “sell stocks now” advice, what is the basis for this idea and to which asset class/currency should the money go?

Posted by FifthDecade | Report as abusive

After reading all the pro and con comments RE: the video bits, then actually watching the video bits (yes, in that order), it’s interesting to ponder the perceptual difference between reading a person’s text-rendering of their opinion or view of something, and actually hearing and seeing them speaking about it. And although I chuckled approvingly at LadyGodiva’s comment that “These should be especially helpful for your illiterate readers,” I can also appreciate the value of the videos. Text is purely linear, save for the occasional italization or SHOUTING WITH ALL CAPS – both of which are still square-probability dynamic modifiers. But a human’s real-time expression is much more subtly nuanced with the sort of dynamic emphasis that makes the important bits of info cut through the standard language plumbing.

The point: seeing and hearing Felix talk will more vividly convey how he is FEELING about the issues he’s addressing.

For better or for worse.

Posted by EricVincent | Report as abusive

When we are talking about the “average investor” we are dealing with people who don’t have fast computers that run models in seconds, and who by and large have seen overall performance of about 1.8% per year for the last couple of decades. And of course it is pretty evident that large investment firms have information the average investor does not have. Getting a CD earning 3.5% is not a bad deal right now.

Posted by dvduval | Report as abusive

I know exactly where you got this idea. Nicely done, though. Bravisimo. Hire a couple of Daily Show writers and you will experience great fame and wealth, and Reuters will get that boost it’s been craving.

I work for beer.

More to the point of the content: what percentage of the overall volume of shares trades do individual investors represent? I’ve never seen this figure anywhere.

Posted by Uncle_Billy | Report as abusive

Thank you for the warning and it’s nice to know that someone knowledgeable about these things is sincere enough to tell it like it is.

It seems to me that humongous meltdowns, while occurring once or twice in a lifetime in the past, are the norm now. I’d wager that in this Great Recession the only reason we haven’t seen those Dorothea Lange-type photographs of breadlines and ruined guys lying in gutters is because we have safety nets like food stamps and unemployment benefits in place that were not there in the Great Depression. But perhaps it’s really just as bad or worse. I’ve lived long enough to remember when regular people like me did not have to stick our hard-earned wages into the stock market in order to get a decent return. An ordinary savings account many years ago could yield 5 or 6 percent. Now people are forced to invest in risky things like real estate and a gyrating stock market that’s boom or bust. Just yesterday I received a promotion from a major financial institution that offered a savings account with 1.30 percent APY–touting that as a real bargain. Most of us cannot afford to put our retirement savings into anything that carries even the slightest risk.

Posted by bluesky192 | Report as abusive

I find videos–yours and other bloggers–largely a waste of time, literally. I can read a blog in about 1/5 the time it takes to listen/watch to a video. And, sorry, some bloggers’ mugs aren’t, well, all that pretty.

Stay with the written word. If I want to watch TV, I’ll turn it on.

Thanks.

Posted by Lilguy | Report as abusive

Videos are great! I read your posts on my Google Reader, sometimes I’m too lazy to read an entire post, a small video is good once in a while.

Posted by tirathmuchhala | Report as abusive

Maybe it’s just me, but I’m sorta missing the Elton John suit…

Posted by HBC | Report as abusive

Excellent idea Felix -

Broadcast Yourself!

Posted by yr2009 | Report as abusive

Corrections: “shares traded” “bravissimo”

Posted by Uncle_Billy | Report as abusive

I love it. I just hope it doesn’t slow you down.

Posted by stevecrozz | Report as abusive