(How informed are these investors? Source: Wikipedia.)
Editor's Note: In March of 2016, Rocco Pendola launched the Seeking Alpha Author Experience, a best-practices guide that shares editors' perspectives with our community of authors. Since then, we've published 133 installments, and readership has grown to more than 1,000 subscribers. Now, we are bringing the Author Experience to the entire Seeking Alpha community. Please share your thoughts in the comment thread below.
The most successful articles on Seeking Alpha provide readers with an idea, deep research, or a point of view that: a) they didn't already know; and b) affects their decision processes. Articles with this type of information are articles with an edge.
Because "edge" implies that readers don't already know everything in an article, authors should devote their energy to perspectives, opinions, and topics that are not sufficiently covered in financial media in general or on Seeking Alpha in particular.
So it's worthwhile for authors to ask themselves, "Why am I writing this? What new information do I have?" Some examples of information that many readers already have or can easily find:
- Boilerplate-sounding company biographical information. Readers probably know that Apple (NASDAQ:AAPL) "engages in the design, manufacture, and marketing of mobile communication, media devices, personal computers, and portable digital music players," and "was founded by Steven Paul Jobs, Ronald Gerald Wayne, and Stephen G. Wozniak on April 1, 1976 and is headquartered in Cupertino, CA." (source: any financial news portal, including Seeking Alpha).
- Past price action. Stock charts are on every Seeking Alpha article page, and they're everywhere on the web.
- Previously published analysis. Whether it's from the buy side, sell side, or from community-driven sites like Seeking Alpha, if it's an opinion published on the web, there's a good chance readers (and the market) already know about it.
- Financial metrics and aggregated data appearing on most stock quote pages. Financial portals aggregate companies' market caps, P/Es, book values, and other basic data. Readers can find that material elsewhere, and perhaps more important, as SA Executive Editor George Moriarty says, "The power of SEC filings is that they are direct from the company, holding it responsible for the information. Dependence on third-party sources leaves an exposure to errors in calculations on those sites."
It's with this attention to "edge" in mind that Seeking Alpha editors strongly encourage authors to:
- describe companies' business models and strategies in their own words;
- avoid focusing on past price history, especially at the beginnings of articles;
- emphasize their own points of view rather than those of other analysts; and
- put primary sources such as SEC filings into context for readers, explaining how the numbers connect to real-world activities.
How does an author start doing these things? We try to let authors share the investment process that works best for them. But one first step that tends to point authors in the direction of "edge" is to read the most recent 10-K.
I'll drive that point home with a comment from SA PRO Editor Marc Pentacoff:
It is quite apparent when an author has read the 10K or not. One can sometimes read the 10-K for about a minute and, with that, be more informed. Or one can look at the financials which tell an entirely different story than the one in the article. A huge portion of originality merely comes from doing the work and accumulating knowledge.
As a crowdsourced platform, Seeking Alpha publishes articles with varying degrees of "edge," and "edge" for a reader who's new to an investment idea will look like boilerplate to a deeply knowledgeable longtime investor. Nevertheless, authors are more successful when they focus on articles that are likely to tell investors something new that could change how they make their investment decisions. We'll increasingly focus the Author Experience on techniques that deliver this "edge" to readers.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.