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Weekend Coverage: Q&A With Abnormal Returns' Tadas Viskanta


Investor and blogger Tadas Viskanta talks about the ways in which we all can try and make our investing lives a little easier.

MINYANVILLE ORIGINAL Minyanville spoke with Tadas Viskanta, founder and editor of the site Abnormal Returns, a six-year-old, investment blog. Tadas is also the author of the forthcoming book: Abnormal Returns: Winning Strategies From the Frontlines of the Investment Blogosphere, which culls lessons learned from his time blogging.

Adam Warner for Minyanville: When someone Googles "financial curation," the first 20 hits are "Abnormal Returns." At least they should be; I haven't actually tested that theory. You literally created this realm. If I ever need to catch up on posts I missed which is....well, always....I hit up Abnormal Returns. My question is, how do you do it? There's an endless supply of material out there. How do you separate the wheat from the chaff, so to speak?

Tadas Viskanta: I don't think I invented anything! Other people like Barry Ritholtz and Charles Kirk were doing great linkfests. The secret, if there is one, is that I am just trying to find items that I find interesting. That is why I am wary of the word "curation." To me, it implies a process that is too precious. If I was trying to create something that other people wanted to read, I wouldn't be able to do it. The other thing is that it has become somewhat easier over time. I've now done thousands of linkfests and have put in the proverbial 10,000 hours.

MV: You've officially hit the Gladwell Threshold of becoming a master of your craft. I've probably used the 9,900 hours you saved me by tweaking my fantasy teams and filling out bracket pools, but I digress.

When I wrote my book, Options Volatility Trading, I found that much of the process was simply organizing thoughts I had expressed in blog form already and simply had to refine into book form. Yours is a different animal altogether; your fresh viewpoints are intertwined with many outside opinions. I'm trying to say that having gone through this, I'm beyond impressed at the work you've put into this, and the end result. My favorite chapter was Chapter 11, "Smarter Media Consumption." I'm a big proponent of minimizing the "noise" out here. Do you have a chapter or section here that you would recommend above the rest?

TV: One of the messages of the book is that we don't have control over the financial markets. All we can do is try and manage our own behaviors to try and avoid the really big mistakes. We all are going to make mistakes along the way; the challenge is minimizing their impact. So Chapter 11, "Smarter Media Consumption," and Chapter 10, "Behaviors and Biases," talks about ways in which we all can try and make our investing lives a little easier.

It's hard for people active in the financial markets to believe, but the vast majority of Americans don't want to spend their time in front of a screen reading financial news and/or trading. In Chapter 12, "Lessons from the Lost Decade," I talk about the ways in which we can try and generate great returns on our efforts outside of the financial markets. It is far easier to try and generate alpha in our lives than in the markets.

MV: Improving financial literacy seems like a real quest of yours (and ours here at Minyanville). I realize that there are no quick answers for someone actually interested in improving financial literacy, but where would you suggest a newbie get started?

TV: Along those same lines, it make sense for individuals to spend more time getting their financial house in order before they start doing much in the way of investing. As I say in the book, "[S]avings is the best investment," so anything you can do to start living below your means will help.

It seems like a lot of that education is happening online. None of these are endorsements, but places like, DailyWorth and LearnVest seem to be good places to get started on getting a better handle on your financial life. I'd recommend Carl Richard's book, The Behavior Gap, to anyone who is starting to seriously think about money. Carl does a great job talking about the big money dilemmas we all face.

MV: Putting on your investor cap for a moment, how do you see the second half of the year playing out? And yes, I recognize the irony of asking someone who runs a "forecast free investment blog" to make a forecast.

TV: I just wrote a post talking about how the seeds of the next secular bull market are being sown. So I will be looking for two things: signs of investor disgust with the stock market, and the relative valuation of stocks vs. bonds. The second half will proceed like it does every year. Things will happen that no one expects. Things won't happen that everyone was worried about. In short, the wall of worry will get built and rebuilt with new bricks getting swapped out for old tired bricks.

Right now, it seems like a crummy time to be an investor, but we as investors have to "stay in game." I mean, what's the alternative? A coffee can filled with cash? We have to focus on our strategies and processes and let the the markets take care of themselves, and be ready when the next up move happens.

MV: I totally concur with that. I'm modestly perma-bull, but we probably never go a six-month stretch without something that wasn't on the market's radar cropping up.

Do you buy into my theory that the Greek Contagion may spread out into the MUPPETS? (That's Malta, Uruguay, Peru, Peoria, Estonia, Thailand, and Serbia).

TV: The one upside of crummy markets, especially for the BRICs, is that the bull market in coming up with new emerging market acronyms seems to have come to an end. From this map at The Economist, the Greek economy is roughly the size of Washington state's economy.

On some level, it seems crazy that the global economy is being held hostage by a country so small on the global scale. There has to be some opportunity is this mess. Some smart guys are going to make a lot of money buying European assets, including European companies that do the bulk of their business outside the eurozone. By one measure, European stock markets are now the cheapest in the world, by far. Timing is, of course, the issue.

MV: That does seem crazy at face value. The ratio of the size of Greece to the weight it has on the markets is pretty staggering.

You're a Cubs and a Replacements fan. Isn't "Can't Hardly Wait" the perfect theme song for a team that hasn't won a World Series since 1908?

TV: There are lessons in both. Baseball is, in a certain sense, good training ground for investors and traders. You go to the ballpark (markets) just about every day. The best players are focused on playing with other great players and taking a consistent approach. In short, not trying to hit a home run every time, not trying to strike out every batter.

Think about it: The best baseball teams win roughly 60% of their games a year. The best hitters get a hit roughly one out of three at bats. Be wary of anyone touting "win rates" much above 60%. In the book, I talk about the importance of expectancy and why investors should focus on that much more than high winning percentages.

The Replacements are a great lesson for any one involved in any sort of creative (blogging) enterprise. You just can't know ahead of time who you will influence or if what you will do will be popular. The Replacements were never particularly popular, but over time they have turned out to be hugely influential.

For example, Craig Finn of The Hold Steady talked about how The Replacements and their song "I Will Dare" influenced him. As a blogger, I recognize that the most finely-crafted blog post I do can end up falling flat, but a short, tossed off post can end up getting a big response. All you can do is do things you think are interesting, put them out in the world, and cross your fingers.

MV: You need to spend more time listening to New York sports radio. The concept that even the best Yankees teams lose 60 games per year is lost on about 98% of the callers and 100% of the hosts.

Many, many thanks Tadas.
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