www.THEBIGPICTURE.com
 

https://bigpicture.typepad.com
 

Think Jim Cramer is the only former hedge-fund gunner turned media star who's got a flair for language?

Last week, I jokingly referred to the notion that the Tax Cuts Crashed Market. It was a tongue-in-cheek reference to the foolish notion of ascribing a single causative factor to the elaborately intricate dance that defines daily market action ... I guess I shouldn't have been surprised when the talking point went out and Fox News blamed the market drop on the NSA leak!
Or who's got an appreciation of culture:
A couple of indie albums this week to explore: Several Arrows Later by Matt Pond PA straddles indie rock and jangly pop: It's not for everybody, but if you like Death Cab for Cutie and the Shins, you may like this ...
Not to mention a mind for the markets?
The breach of a key uptrend in the ratio of the S&P 500 to the 10-year US government bond yield suggests either stock prices are headed much lower or bond yields are headed much higher — or both — in the longer term.
These were the product of Barry Ritholtz, chief market strategist and fund manager for New York-based hedge fund Ritholtz Capital Partners (RCP). And Ritholtz's status as a "media star" notwithstanding, his weblog The Big Picture has joined The Kirk Report as one of my top o' the morning blog reads Monday through Friday. As Ritholtz notes at his blogsite, "If you're looking for dry, run-of-the-mill market observations, you've come to the wrong place — expect the unexpected."

Ritholtz's The Big Picture is an excellent contribution to what are known to some in the blogosphere as "expert blogs." While blogs have gained notoriety for both sociopolitical commentary and a certain professional-caliber narcissism (the two not necessarily mutually exclusive), the expert blog phenomenon is one that must be applauded by all of us who have found ourselves subtly (or not so subtly) getting a greater degree of our news and opinion from places other than the traditional news media. Like widely respected Middle East historian Juan Cole on Iraq, or University of California at Berkeley economist Brad deLong on economics, Barry Ritholtz has used the blog form as a way of making his knowledge of the world of finance and market behavior accessible to any interested party with a web connection.

For those who have come of investing age during the information revolution of the past decade, it is hard to imagine how our trading predecessors managed without online brokers, real-time streaming quotes, fundamental corporate information within a mouse-click, and more technical analytical tools than keys on a grand piano. To that list, we can add the free insights available from men and women who for years have made the financial markets their home.

AROUND THE PICTURE

As befits a blog in 2006, The Big Picture is easy to navigate. Ritholtz warns readers to "look forward to few graphics and zero multimedia," but what graphics The Big Picture does have only underscore the cleanliness and coherence of the presentation. The Big Picture is easy on the eyes and while surprisingly colorful for a finance-oriented blog, refreshingly pleasant to read and browse through. The main articles are down the center-left column, with departments and links running down a thinner column on the right.

These departments include "Essays and Effluvia": Ritholtz's "alter ego's musings" on everything from the best burgers in New York City to America's greatest R&R band. A Google search engine follows this, after which we get another department, this one called "Apprenticed Investor." This department links to a series of articles Ritholtz writes for and publishes with TheStreet.com. The series is geared toward helping those just getting started in investing with an understanding of some of the basic concepts of buying and selling stocks and mutual funds, as well as managing risk. Recent articles have included "Seven steps for handling stock tips" and "The stop-loss breakdown."

Below are more fun items. A wishlist department titled "Amuse Me" invites readers to send books and music. The "About Me" department provides email links, subscriber options, a calendar, and a disclaimer reminding people that The Big Picture is, at root, just a blog and not a product of any of Ritholtz's institutional efforts. A list of recent posts follows, which itself is followed by more fun in the way of a list of books worth perusing by authors such as Daneil Reingold (Confessions Of A Wall Street Analyst) and Ed Easterling (Unexpected Return). I can't help but mention that one of the books on that list, Trend Following, was penned by Michael W. Covel, who was interviewed in the June 2005 issue of Technical Analysis of STOCKS & COMMODITIES.

Below the Worth Perusing list are a set of topics or keywords that blog visitors can use to find out Ritholtz's thoughts on specific topics including consumer spending, corporate management, Federal Reserve, inflation, psychology/sentiment, real estate, and technical analysis (of which Ritholtz, it should be said, is a supporter). "MP3's Spinning" reprises the fun theme with a list of what Ritholtz has been listening to (top three? Donavon Frankenreiter, Jenny Lewis & the Watson Twins, and Sarah Vaughan). Archives going back to August 2005 are next, followed by a "Favorite Links" section divided into subgroups like "Technical Analysis," "Fundamental Analysis," "Economics," "Stock Tools," "Investment Information," and more. The final part in this section along the right-hand side of the home page, "Recent Comments," is interesting, noting some of what those who visit and read The Big Picture have to say.

HOW BIG IS THE BIG?

Taking a quick trip around the blog underscores what I think is so worthwhile about The Big Picture. Not only is there solid financial and economic insight and discussion, where a post about his recent QQQQ options trades will run alongside a post on the ratio between the Standard & Poor's 500 and the 10-year note yield, but also the fact that Ritholtz includes so much conversation about the rest of life outside the markets makes a reader like me feel that he is all the more capable of understanding the vast inputs that go into making bullish and bearish markets.

When Ritholtz riffs about the attempt by Time Warner to exploit BitTorrent technology to sell DVDs, I know that his observations about this development in the business world inform and are informed by (as we used to say in the post-modern world of academia) his understanding and discussion about product cycles, consumer sentiment, and the market for investment in entertainment companies. Ritholtz tells a pretty good story, and understanding stories — in life and in the markets — is a key step in anticipating, dealing with, and betting on the unexpected.

What is it that attracts people to blogs? I think it has to do with a fear of the unexpected. Whether in politics or the markets, people who read blogs tend to have a keen interest in knowing what the heck is going on. And many of the more popular, more widely read blogs feature hosts who by virtue of experience, training, or old-fashioned persistence have convinced thousands that it is worthwhile spending time at their (often homemade) web log to find out what the heck is going on.

In politics, this need comes and goes with the events of the day. In markets, however, this need is omnipresent. It doesn't go too far to say that markets are predicated on uncertainty - from the uncertainty of tomorrow's open or close to the moment-by-moment uncertainty of which price better reflects a market's near-term direction: the bid or the ask. Those who visit blogs like The Big Picture are part of that search party out into the unexpected. And in a field like trading and investing in which most participants tend to feel isolated, there's nothing like having an experienced hand like Barry Ritholtz riding the big horse near the head of the posse.

-David Penn, Technical Writer


-bigpicture.typepad.com



Return to Table of Contents
Originally published in the July 2006 issue of Technical Analysis of STOCKS & COMMODITIES magazine.
All rights reserved. © Copyright 2006, Technical Analysis, Inc.