Supporting this blog and reader feedback

February 17th, 2010

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Recently, one of our readers seemed to be pissed off with what seems to be our attempts at getting some ‘advertising’ revenue (see the exchange at A little trick to snipe profits from the market- ?52 Week High Friday Rule?). Technically, that was not advertising in the traditional sense- what we were doing was to send relevant traffic to our affiliate business partner.

Of course, in the ideal world, information is free and there’s no hidden agenda and advertising. Bloggers would write just for love, passion and sacrificial good-will. We would love to live in such an ideal world. Many of our readers would love that too.

But unfortunately, the real world is far from the ideal. As another fellow blogger wrote,

Like many other sites recently, I am now starting a fund raiser. Blogging is a very time and effort consuming activity. And while advertising provides some revenue, it is nowhere near enough.

Like you, we are still humans who have to pay the bills, eat, sleep and suffer the demoralisation as any humans do. Eventually, our finite human limits will be breached. Worse still, the evils of inflation and moral hazards (which the governments everywhere seemed intent of achieving), is making a bad situation worse for society as a whole.

And you know what the problem for bloggers like us? As we wrote in Google vs Rupert Murdoch- who will win?,

So, here comes the crucial point to understand: information (collectively) is free and abundant, but consumers? attention (for each individual information provider) is scarce. Actually, each feed of one another in a positive feedback loop- to attract the attention of consumers, businesses are forced to give more and more information away, which in turn causes information to be more abundant (collectively), which in turn makes consumers? attention even more scarce (for each individual businesses), which forces businesses to give yet even more information away.

Unlike say 10 years ago, what is happening today is that the cost of producing free information (e.g. researching, writing, reading, etc) and services is exceeding the revenue gained from scarce attention (e.g. advertising, sending traffic to affiliates). From what we can see, information producers on the Internet are bleeding dry. Newspapers are going busts left, right and centre. If well-capitalised Rupert Murdoch is complaining, then it is very telling that a significant percentage of online information producers/service providers are in pain.

From an investors’ point of view, it is a no-brainer that Google’s business model is much better than Rupert Murdoch’s. As Jaron Lanier, a computer scientist/philosopher wrote in a FAQ of his book,

The only business model for aggregated or collectivized information- information that isn?t bought and sold directly- is the routing of advertising.? Everything but advertising becomes free.? It isn?t the advertisers who become rich in the long term, because there are fewer and fewer things to be sold, other than ads.? It is the owner of the ad exchange that becomes rich.? At the moment this means Google for most purposes, though in the financial sphere there are other parties playing an analogous role.? (I should say that I personally know the Google folks, and like them.? They didn?t have an evil plan- but they did find themselves in a niche that is problematic.)

That’s why most of the free stuffs on the Internet seems to have ‘hidden’ agenda and sales hype. As long as the price of information are pushed towards zero, such conflict of interests will be the norm.

That’s the reason why we advertise.

Some of you may find that irrelevant advertising because you are not into trading. But please look at this from our perspective. We have a wide variety of readers, many of which are into trading, forex and penny stocks (assuming that our Facebook community is indicative of the general readership of this blog). We even have a sizeable number of American real estate investors (it’s a surprise to us). So, what we were doing was to try to direct the traders (among our readers) to our affiliate business partner.

From the perspective of the non-traders, that particular business partner’s wares can be seen as sales hypes and hidden agenda. But personally, we find that we can trust them more (relatively), compared to the heaps of crap you can find on the Internet. That’s why we promote their trading products because we ourselves use them and find them useful. The truth is that, with so much sales hypes, hidden agendas and crap on the Internet that it is pretty much getting more and more difficult to tell the difference between the crap ones and the gems. To be frank, we have other businesses who wants to promote their wares through us and they either failed the hype-test or we aren’t sure whether they are scams or not.

And here is our problem. In the Internet, everyone can remain anonymous. But we can’t tell the traders among the investors (other than the few who engage in conversations in the comments). What we see from our statistics are a sea of faceless numbers. Whenever statistics are involved, the only way to go is to run on statistical probability (in reality more towards guestimates). So, for example, if we guestimate that x% of our readers are traders, then we will ‘advertise’ a specific way so as to ensure that the least number of readers are pissed off. If the percentages are much higher for a specific segment, then our ‘advertising’ will be louder because based on statistical probability, the chances of the ‘advertising’ being relevant are much higher and therefore, less likely to piss off someone.

One of our readers suggested going to the donation route. Well, we are not sure whether this is a better route. Certainly, it will piss off less people. But would that be even less sustainable in an already unsustainable situation? Also, some of us are resistant to the donation route because it smells like begging. But would that be worth a try?

One fellow blogger is going along this route:

So, to enable this blog to continue at the current rate of activity or to expand, readers really need to start donating. I am letting future activity depend on this. No donations means no blog. Few and/or little donations means little activity.Many and/or large donations means unchanged or more activity. The future of the blog is in your hands.

Donate according to how much value this blog gives you and your ability to donate. So, press the “donate”-button in the right side bar, and donate now (or as soon as possible)!

We are going to try donation as an experiment and let our readers’ donations drive the level of activity and quality of this blog as well as the level of advertisements (i.e. more donations, less advertisement). In other words, donate according to how much value this blog gives you and your ability to donate. Please note that a few advertisements cannot be removed immediately due to contractual obligations with the advertisers.

Also, please leave feedback on what you think in the comments below. Without feedbacks, what we see are just a sea of statistically faceless numbers. Also, to help us understand our readers, we are conducting an anonymous poll here.

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  • Anon

    Hey CIJ, have you thought about doing a newsletter service? I think some other blogs started similarly to you then switched to a newsletter service (for free). Then gradually rose prices as the amount of subscribers increased.
    Seems like a good way to keep doing what you do and pay the bills ? πŸ˜‰

  • Hi Anon!

    Thanks for your feedback.

    Hmmm….. not sure about the idea. How would people feel if they have to pay what they used to get for free? It is said that it is psychologically easier to lower price than to raise prices.

    But nevertheless, we will take note of your idea. πŸ™‚

  • Anon

    You would lose some readers, but at the end of the day you cant be expected to do alot of work and not pay the bills.
    If you priced it lower than newsletters of inferior value and quality, that would be a good pricing niche.

    I dont think a donate button will do much and unless you are with a big publishing house, book sales wont do much other than help get your name out there.

    Anyways, just some suggestions πŸ˜‰ Hope it helps !

  • Pete

    Good points CIJ.

    One concern for any paid service is that you will then have the obligation to your readers to produce continually good quality, (and regular) articles.

    Whilst article quality or regularity has never been an issue these past years, it is just something to consider looking forward.

    Also some members who pay might find that articles are not useful for them or not to their liking and may be upset.

    That said, you can't please anyone. And if you try you will probably end up pleasing no-one.

    If you go with the majority that will commit, then you'll do best. Finding the majority that will commit is the tricky part.

    If donations are the way to go, I suggest putting donaters on the front page in a frame, eg “CJ donated $5” or something. Interested in the thoughts of others on that.

    Also, I would recommend providing select articles purely for donaters every now and then, as a reward.

    And…a dedicated page for donations that has a bit of information about donations, why they are required, who has donated, privacy policy info, etc. And you could advertise your book there too as another form of donation.

    That said, another great addition to this website would be a polling section. Eg, just like you did polls for this article, integrate that polling into articles. Eg “do you think China will bust in 2010? a) Yes b) no, but soon after c) China will never bust”. That way people who don't want to comment can also contribute and you might find the feedback interesting.

    Just some thoughts…

  • Pete

    “That said, you can't please anyone. And if you try you will probably end up pleasing no-one.”

    Erm, I meant you can't please everyone.

  • Pete

    Actually, another idea would be to have a semi-subscription service, much like Business Spectator and some others.

    That way some articles are free to all, and some are for (paying) subscribers only.

    That way you keep your fan-base and also get paid subscriptions from people who want to read the rest of the articles.

  • Anon


    That said, you can't please anyone. And if you try you will probably end up pleasing no-one.”

    So wise Pete. Took me along time to figure that one out !

  • Keep going, but it's basically pro bono and for our own satisfaction, I think.

  • Pete

    Well, ignoring the typo I did, I can't really claim that one – it is a phrase i've heard somewhere.

    Seems to ring true though πŸ™‚

  • Everyone wants a free lunch. And then when the filling isn't quite what they want, they complain about it!
    The solution is simple, just print your own currency πŸ˜‰

    Your article on this makes good points, and is probably more diplomatic than mine would have been LOL

    I continue to enjoy your articles, please keep up the good work.

  • Hi Pete!

    Thanks for your ideas.

    If donations are the way to go, I suggest putting donaters on the front page in a frame,

    For this, it's better to ask for the permission of the donors. Some people may want to remain private.

    Definitely, donors need to be rewarded.

  • pb

    I think the current business model is perfect; better quality articles than most other websites, all funded by harmless advertising which on many occasions turns out to be relevant and useful!

    I find some of the advertising useful so why would I be motivated to make donations to see less of it???

    The advertising that is not useful to me does me no harm as long as I have my wits about me. Why would I get pissed off? I don't think that kind of reaction would help me become a succesful contrarian investor!

    bdw cij, you have previously touched on the way of thinking required to be a contrarian, perhaps another article that further expands on this area or delves into other mental aspects of investing.

    thanks for all the great articles.

  • @pb

    bdw cij, you have previously touched on the way of thinking required to be a contrarian, perhaps another article that further expands on this area or delves into other mental aspects of investing.

    This is the second time we received this request from our readers. Looks like it is a pretty important topic. So, we will come up with a plan to talk more about it. πŸ™‚

  • Anon

    Yes +1 for me on that topic.
    From personal experience being contra to the crowd seems to work best at extremes. The crowd tends to be right most of the time except at important turning points.
    I find when the media is pumping an idea hard this is usually a good signal to do the reverse (not always).

  • Anon

    Walmart Earnings tonight:
    Consensus: $1.12 4th qtr
    I think Walmart will smash estimates. This is trading on a forward pe of high 13's for 2011 earnings (lower end estimates). I cant think of a time when Walmart was trading on a such a low pe multiple in the last 40 years ? Still can grow in US and large growth potential in overseas/emerging markets.
    Thoughts ?

    Remember above not advice, just commentary — seek financial advice from a qualified competent advisor.

  • Anon

    Correction, that should be 2010 earnings not 2011

  • @Anon

    Assuming that Walmart smashes analysts' expectations, we have a feeling that the market will rally.

    The question is, is this rally a correction to a correction (i.e. more down is coming)?

  • Anon

    Yeah well we could correct again and from memory I think some falls in bull runs have been 15%+. So that would suggest more downside. But earnings have been very good and sentiment is still not excessively optimistic so i'll remain a bull for now — forever nimble πŸ˜‰
    Maybe keep buying OTM puts to protect the downside?

    Remember above not advice, just commentary — seek financial advice from a qualified competent advisor.

  • Anon

    Walmart beat 1.12 … 1.17….but Wallstreet doesn't like it lol.
    Their 2010 forecast of 3.90-4$ is about what I estimated ($3.95). More frugal retail environment and deleveraging cant be bad for old wally!

    Above not advice, just commentary — seek advice from a financial advisor.

  • CJ

    I suggest letting the readers know whether a post is a sales pitch. This can be done by putting [ADV] for adverts in the title.

  • @CJ

    That's what we are thinking about too. We have just written up an advertising/affiliate policy.

    We will do is that for articles that have links to our affiliates we will put an Advertising/Affiliates tag on them. The tag are located at the bottom of the article.