The interview discusses:
- The state of financial journalism
- How Investopedia is helping individual investors
- IAC’s strategy with Dot Dash
- How you can potentially profit from Investopedia’s proprietary anxiety index
- How to get your website on the first page of Google
- And much more…
Available wherever you download podcasts
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Transcript of Interview with Caleb Silver
Jonathan Boyar: Welcome to the World According to Boyar, where we bring top investors, bestselling authors, and business leaders to show you the smartest ways to uncover value in the stock market. I am your host, Jonathan Boyar. Today’s guest is Caleb Silver, Editor-in-chief of Investopedia, a leading business website with over 19 million monthly unique visitors. Caleb started his business news career at Bloomberg, where he worked as a senior television producer, Caleb then joined CNN and was a senior producer for the Situation Room with Wolf Blitzer. Eventually becoming the director of US Business News at CNN. In 2016, he joined Investopedia. Caleb, welcome to the show.
Caleb Silver: Thanks for having me. It’s a real honor to be here.
Jonathan: Interestingly, you started your career as a documentary producer but pivoted to business journalism. What made you switch?
Caleb: That was an easy pivot. Actually, not at all. I was in journalism school in graduate school at NYU in New York in the mid-’90s but I had started as a documentary producer, and I just been traveling around Central and South America producing Wildlife documentaries but I wanted to go to graduate school. At NYU, they had an internship program with Bloomberg and Bloomberg News and Bloomberg TV was really just starting out. I knew how to shoot I knew how to edit so I had some TV skills. Then I started working for them and interning for Bloomberg, right as the internet bubble started forming in the late ’90s.
As that was happening, I became more and more fascinated with the story of money in the story of business news and was able to translate my production skills into being an actual TV producer. When I got out of graduate school, I did some more documentary work, but then I was eventually hired by
[00:02:00] Bloomberg right as the bubble was forming. I jumped right into the middle of a big frothy internet bubble.
Jonathan: What was it like starting at a time where the market, I guess it was 96, 97 was frothy but if you said to sell the market, you would have been wrong for about five years, or four years, what was like being in the media business then?
Caleb: It was fascinating because it was really the birth of the companies that are some of the giants and today, amazon.com was just forming. I got to know Jeff Bezos, early on in his days as CEO as a very new public company, got to interview him several times, obviously got to know the companies that rose like rockets and fell like Icarus like the pets.com of the world.
I was learning about these internet businesses, learning about e-commerce, learning about this new form of the digital economy while I was covering it, and that was totally fascinating and at that time, there was a lot of giants and billionaires being born out of startup companies, but also some established companies like Berkshire Hathaway I got to interview Warren Buffett several times. I was thrown right into a very busy mix at a very active time. Bloomberg was trying to cover it in a responsible way because it’s a strict business news media organization and it was a great place to learn.
Jonathan: You mentioned you got to meet Bezos at the time. Could you tell that this is a guy who was destined to become one of the greatest entrepreneurs of all time?
Caleb: Absolutely, you can tell. Just by the way, he carried himself and by that raucous laugh that he has. He would just look at you in that funny way and you’d asked him a question. He would just laugh in your face. When are you going to make a profit, Jeff? He would just laugh right in your face and say, “We’re not interested in the average student providing the best customer experience on the planet.
You just knew he was singularly focused but you also knew because of the company he carried and the investors that swam in as pilot fish to his whale, you knew that he was going places. I was there for the ups and downs of the big internet calls when Blodgett calling for $500 a share on Amazon and we interviewed him. All that was happening
[00:04:00] at a time it was moving quickly. In this new business news television network, it was really a fun place to be.
Jonathan: Do you think the media, I’m just saying as a whole, I’m not saying where you were, but just as a whole, has done right by the individual investor during these ups and downs?
Caleb: I think there’s always room to say that the media could have done better or miss something or were cheerleading the bad behavior on the way up and making stars out of some of the folks that didn’t keep folks best interest during the financial crisis. There was a lot of that business journalism suffers from access journalism, which means, you want to talk to the power and the powerful. I mentioned, Warren Buffett, I mentioned Jeff Bezos, that’s cool, there’s celebrities in business news. Sometimes we deify business leaders too much and we don’t dig deep enough when something seems too good to be true.
I think it’s gotten better and I think it continues to get better but there’s always going to be times when you look back and say, “We should have looked a little bit harder.” You can say that about the financial crisis and what was happening in the mortgage industry. You can say it about what’s happening now in terms of the uneven recovery and the money going, the stimulus packages and the rescue packages, you could set it in the internet bubble as well.
We always suffer from that because we get caught up in it like sports, and we don’t get deep enough at times, but at the same time, there’s some incredible business news journalism going on right now that will define our medium for generations.
Jonathan: In terms of educating the public, I know they’re telling you what’s going on, but when I see CNBC, in March on Sunday night, having special reports, America in crisis, et cetera, is that healthy or is that something that is more sensationalism?
Caleb: There’s always going to be sensationalism and CNBC, which I have a lot of respect for, but they also do treat the markets and investing like a sport. They’re programmed that way and they’ve always been that way. When you have these massive drops like we experienced throughout March, it’s a programming opportunity. Why? Because their ratings are
[00:06:00] high, while there’s a lot of market volatility and is no different for Investopedia, we have a lot of traffic. There’s a lot of volatility. People are very concerned about their investments in their finances. We benefit from that as well.
They’re going to take advantage. TV networks, especially are going to take advantage of the fact that they have a lot of eyeballs on them and make the most of it by dropping in specials like markets in turmoil. By keeping up the breaking news bar all day long to make sure people are still glued to the TV, their businesses at the end of the day, their media businesses, but inside those businesses are some very responsible and professional journalists. At CNBC, at Fox Business News, at the Wall Street Journal, wherever you look, there are some really good business journalism happening, but of course, they’re going to take advantage of the volatility to make a big deal out of it.
Jonathan: You were an executive producer at the Situation Room with Wolf Blitzer, and this was a major show. Can you just take us behind the scenes, what would it be like to work there today during a crisis like this? What would a day be like?
Caleb: Today I still think they’re working from home. Everything that we were trying to do in a newsroom are having to do with the challenges of working from home, that’s it. CNN is doing a pretty good job of it. I joined the situation room, right as Hurricane Katrina was forming. In fact, I was down in the Gulf of Mexico the week before doing stories on how to evacuate oil platforms in the event of a hurricane. Katrina hit and right basically when that show started and what that show was, was basically live feeds coming from all over the country. The situation in Wolf Blitzer would present you those live feeds as he was seeing them.
There was almost no delay between what was coming into our newsroom and what was going out on air and we had to react and pivot very quickly as there was real-time developments happening during Katrina. There was evacuations, there was flooding, there was the Superdome, there was oil spills. There was nonstop activity and instead of repackaging, we just gave it to you live. It was a rush and you had to be super nimble and that show is three hours. I think it was actually two hours and then it came back for an hour. We were stuck in our seats
[00:08:00] covering breaking news basically the entire time.
Jonathan: Now you have to talk about your current gig at Investopedia. In full disclosure, I’m a member of the editorial review board at the company and our research service, has profiled your parent company, IAC, on numerous occasions. Investopedia is part of Dotdash, which is owned by IAC. What is Dotdash?
Caleb: Dotdash you’ll know as about.com from internet 1.0. About.com was an enormous reference website, really born in the early days of the internet. That changed hands a few times. Most recently, was with the New York times when IAC bought it years ago, I think 2014 or 2015. Then IAC bought About.com, Google had a big algorithm change as Google likes to do, and basically pushed a lot of About.com results way off at the first page.
It was a lot of competition and Google, of course, runs its own search engine and wanted a lot of its results, but it pushed a lot of About.com’s results back and if you know you’re not on the first page in a Google search result, you’re basically not there. They tried to rescue About.com and instead the CEO, Neil Vogel, and his team realized that the internet was very vertical, people have high intent when they go search for something unless they’re browsing and they’re browsing news or browsing other sites.
What About.com had was that high intent traffic, it’s not people going into About.com and browsing around it’s people searching something very specific, whether it be a recipe, whether it be symptoms for a health matter, whether it be information about their finances or about their investments, About.com had all that content, but it was broadened under this one big umbrella. They broke it into about seven or eight vertical sites. Verywell as the health site, TripSavvy as the travel site, the Balance is the personal finance site. All of these were About.com/money About.com/travel.
They broke it into these sites, rebranded it, relaunched it, and basically rescued these sites from the second or third page of Google traffic started growing again.
[00:10:00] In the meantime, Investopedia was purchased by, IAC, I believe in 2015 in another transaction, we were in a different part of IAC called the publishing unit. After a while, they realized that Investopedia was very similar to the old About.com sites to the new Dotdash sites.
They folded us into that group two years ago. Now we’re a part of a portfolio of about 12 or 13 sites, including Brides.com, Liquor.com. We bought TreeHugger and the Mother Nature Network recently, of course, there’s Verywell Health site, TripSavvy, I mentioned. We’re a part of a big portfolio that reaches about 100 million people monthly across our sites, but it’s all high intent content. It’s stuff you browse, it’s stuff you go to for a reason.
Jonathan: I hope you’ve been enjoying the interview with Caleb. To be sure to never miss another World According to Boyer episode, please follow us on Twitter @boyarvalue.
You’ve mentioned, it’s interesting, if you’re not on the first page of Google, you’re basically not there, which is obviously true. What amazes me about Investopedia is, if I wanted to look up a financial term from Google, let’s say EBITDA, without fail, you’re usually number one or number two, how does that happen?
Caleb: That’s one of the benefits of being 21 years old. Investopedia is 21, in the internet years, Jon, as you know that’s like 210 years. We’ve been around a long time. We’ve been around with a lot of reference content that has what we call backlinks. We show up a lot in the first result or for a second or third result because we have a tremendous amount of content, 30,000 articles on the site, we’ve been around for a long time so we have that credibility. We also have a lot of backlinks from influential sites. It’s great to get sites, especially .gov or .edu sites, sites that people respect in the authority. Referencing Investopedia is part of it, so we have that.
We have loyal users who rely on us a lot, and we spend, Jon, a ton of time working and improving our content. You mentioned you were on
[00:12:00] editorial review board. We have about 50 people or experts across the entire industry of investing in finance, that review every one of our articles and tell us if it’s good or if it needs improvement, we go and improve it, we put it back out and we’re on this constant state of improving and bettering our content for our readers. We want to make sure that we are giving them exactly what they’re looking for and that plus that legacy and a good reputation is what helps you get to that first page of Google.
Jonathan: Ask.com basically almost failed because of Google’s actions. You’re heavily relying on Google for traffic. They’re basically frenemies. How do you protect yourself to make sure that doesn’t happen again?
Caleb: Well, Google updates its algorithm at least two times a year. In the finance space as you know, there’s two things that are really important to get right on the internet, medical information and financial information. Google has a thing called, Your Money or Your Life, YMYL. They have real human beings who are smart people reviewing content across our vertical, right across the entire finance space. They make an algorithm change and they’re looking for more authority, or they’re looking for more expertise from the sites that are providing the information that we’re providing.
They want to make sure that we have by-lines from real authors that actually know what they’re talking about, that we have a review board of experts like you and others who are actually are professionals in their field and they’re saying, “Yes, this is the answer that is the closest to what people are looking for her.” This is giving them the information that they need.
They have reviewers that look at that content and they say, “Yes, that’s actually what the intent of the searcher of the reader was.” They reward those sites that do better. That’s principally how they work. There’s, of course, sponsored paid advertising you can get on Google and that’s a completely different game and we don’t play that game. We play the, make the content as easy and clear and direct to answer user’s questions as possible and we’ll get that traffic, and people will come back to us and rely
[00:14:00] on us year after year after year.
Jonathan: People go to your site or direct to your site to find that information, pre-COVID. It was a great economy, unemployment was at record lows. What were people looking to learn more about?
Caleb: Pre-COVID, we were at record highs. It was record high after record high, but there was some creeping volatility. We saw a lot of searching interests around volatility about what happens when multiples expand, what’s a market bubble. We also had a lot of people even looking up the other side, what do we do? How do we potentially short the S&P? How do we diversify if we feel like we’re a little heavier right now? It was a lot of the stuff you feel when the market gets a little bit tippy and toppy, we started to get a lot of that search and a lot of that search attempt.
Don’t forget, we had just come out of 19, which was great, but there was still the phase one of the trade deal that was being implemented so eyes were on that. 2020, it’s been a crazy year so far. I believe we had some attacks on oil fields, all kinds of activity happening in the market outside are preloaded.
Jonathan: Starting with say in February or late February, early March when COVID was front-page news, how have those searches evolved? Today it’s May 26, the market is up big at least as of half-hour ago. It’s been a dramatic rise up. How is the evolution changed?
Caleb: Well, we see it in what we call our anxiety index, the Investopedia anxiety index. That measures search volume around fear-based terms around the economy, with the macroeconomy, around financial markets and around personal finance, credit, and debt. There’s about 13 or 14 key terms that we look at, we look at the whole corpus, and we look at where that search volume is increasing.
As we got into this heavy volatile market, in late February, March, it was obviously around volatility, we were having big seed market drops, we were having circuit breakers, trip at the stock exchange. People
[00:16:00] were looking at that, they were looking at what happens in pre-market trading, they were looking at ways to short the market and hide in gold and hide in fixed income, but then we’re also seeing, interest rates, the Federal Reserve and a barrage of monetary policy and taking interest rates down to zero.
They started looking about negative interest rates, they were looking at the Feds impact on the economy, the Feds impact on the stock market, you can see the anxiety rising and it was rising even before market volatility got crazy. The anxiety index and the VIX usually track each other fairly closely, and the anxiety index we found trips a little bit earlier than the VIX because people are saying to themselves what’s going on, let me go learn what’s going on coming to Investopedia and other sites to figure out what is happening in the market dynamics and then going and executing trades. It moves a little bit ahead.
Then what we’ve seen since is this great divergence as the markets rally 28 to 32%, over the last month or so. The markets done great, but people are very concerned about their personal finances and about the economy, which makes total sense when you see what’s happening on unemployment, when you see what’s happening rising bankruptcies when you see what’s happening with these continuing jobless claims. You see there is real great divergence between financial markets doing great, but the economy deteriorating under our feet.
Jonathan: You’re basically crowdsourcing over 90 million users a month on how they’re feeling?
Caleb: Right, and that’s one of the benefits of being as big as we are. We get our finger on the pulse of what investors are feeling. These are mostly individual investors that come to us. There are institutional investors that come to us but they get their research and they know the game like you. This is real investors and they’re active and that we have several newsletters.
I write two a day, one of the morning called the Express and one in the afternoon We actually pull and survey our readers because these are very active investors all over the world, about what they’re feeling, what they’re doing with their money, stocks that they’re buying, securities or instruments that they’re getting
[00:18:00] in and out just to see what they’re doing. These are very smart engaged investors who have a very particular point of view on the markets.
Jonathan: How far back does the index go?
Caleb: The anxiety index goes back pre-financial crisis, so 12, 13 years. We have data going all the way back that we’ve been gathering year after year after year. The surveys we do, we do them every month now because the markets change so much, and investor behavior has really changed. The animal spirits are out in the wild, as you know, Jon, and it’s fascinating to watch.
Jonathan: I guess your wildlife documentary skills will come in handy.
Caleb: Right, full circle. I’m back to doing what I started doing.
Jonathan: This seems like very valuable data that you have. It seems pretty forward-looking not backward-looking. I’m not a fan of the VIX, I think it’s too complicated. What you’re seeing seems a lot more real. There’s a firm data tracker by Nick Colas, I don’t know if you know him. He measures volatility by the number of days, the S&P 500 has increased or decreased by 1%. Typical year I think it’s 54 times, I think right now we’re on May 26, and it’s already happened roughly 54 times in a year plus or minus 1%, but this seems like a real measure of what true volatility is.
Caleb: I totally agree. I never would have thought of it. Beforehand, I was at CNN Money and I have created the fear on money index which actually looking at money flow through a variety of instruments, and you mentioned your friend with the S&P and moving 1% or more, that measures the put-call ratio, it measures stocks making 52-week highs or lows. It’s got real inputs from the market, but it’s exact, in that, you can actually get those numbers.
The anxiety index is a sentiment index, which is this feeling, “Oh my gosh, what’s happening? Let me go learn about this to make sure I understand it because I need to reallocate rebalance, put money
[00:20:00] somewhere. We see a lot of that and it makes a ton of sense.
I came from the news world as we talked about, the news world is very push. “Extra, extra, read all about it, here’s what’s going on, let me tell you, let me tell you, let me tell you.” The Investopedia world and the dotdash world is really a pull world where we’re pulling information by what people are searching for, it’s a very different set of muscles that you use and a very different way of looking at the market and the way investors are behaving and I find that fascinating.
Jonathan: The anxiety index speaks to investor behavior. I’ve always loved studying individual investor behavior. I always feel whether you’re wealthy, whether you’re just a regular person on the street, I think the individual investor’s worst enemy is usually themselves, their emotions.
Jonathan: What are you doing during a time like this, to stop that, to help an individual, for lack of a better term, from himself or herself?
Caleb: Right, great question. We’ve had to go into a lot of our content, which is written throughout various market cycles. Don’t forget, we’re 21, so a lot of the pieces on our site are old. We’ve got to make sure that we’re speaking to people in the voice of what’s happening today because you always have to make sure you’re talking to your reader where they are right now. We’ve had to update a lot of content, we had a lot of stuff on investing in oil stocks and how to invest in oil stocks.
When oil collapses, the entire energy complex basically collapse under our feet, we had to update a lot of that content and make sure that people realize that this was happening, and a lot of what they were about to read needs to be seen through these lenses right now. There was a lot of that going on. I also mentioned that we have newsletters. I write a newsletter in the morning and one other night, always from the point of view of the individual investor, which I am, who is just looking to make sense of the world and then make the right decisions based on where they are in life.
I don’t pretend to be an expert stock picker, because I’m not, I don’t give investing advice, I give investing
[00:22:00] perspective. I work with experts like you and others to give perspective on what’s happening because the best thing Investopedia can do, is educate people about what’s happening and help them, lead them to making good decisions, and not tell them what to do, but say, “This is the right way to think about these things in order for you to make a call” and then hopefully, people will be reasonable or talk to a financial advisor.
We’re big believers in financial advisors and planners, and then do the right thing, but it starts with education. That’s why we’ve been able to be around 21 years, and now we’re able to do well in times where people are really seeking to make sense of the world.
Jonathan: I could be totally off base, but at least in my opinion, investors in Cannabis Stocks, investors in cryptocurrencies, for the most part, are going to lose their money. It’s probably put you in an uncomfortable position because I imagine that those are pretty high intent-driven folks. How do you explain to the average investor how they should be making decisions with regards to, “some hot topics”? Well, Cannabis was hot about a year ago, crypto is hot and now it’s not, how do you do that?
Caleb: Well, you have to disclose that right away to the reader. We do have a lot of interest in Penny Stocks, Cannabis Stocks, Crypto, you name it, but that’s been going on forever. Even before Tulip Mania, there was some other mania. There’s always going to be people on the fringe and traders, and people that like the actual market. Look at what we’re seeing these days with all the signups on the online brokers and this intense trading activity, even in the options market, because the market’s been hot and bottled that’s brought a lot of new investors in.
We start with education and that is telling people right away, trading Penny Stocks trading and options. Any of these are dangerous instruments, you have to know what you’re doing.
If you haven’t learned the basics of how to invest in pick your security, pick your asset class, read this first. We give them a step by step, we even have online courses they can take
[00:24:00] If they want to go and trade, we’re not going to stop them. We want to make sure that they know the rules of the road first because the road can be very bumpy.
Jonathan: You talk about the uptick in trading. There’s an interesting theory circulating that how day-trading is replacing sports betting right now, there’s no sports to bet on. Are you seeing any of that? Is there any evidence from your searches, et cetera, that that’s actually the case?
Caleb: No, but there is a lot of evidence that there’s a lot of first-time investors coming to the market. We see that through traffic for things like intro to investing, or options basics, or how do I invest with $1,000 or how do I choose an online broker to start investing? We get all of that.
Plus, we do review the online brokers and the Robo-advisors, and now Forex brokers to rank them by our experts, to tell people which is the best platform for them based on their need. We do a lot of that now. We’re getting a ton of traffic there, because people are signing up, good for the industry, but people are also getting into a risky place.
Trading and investing in the stock market’s always been risky, but when you have a dynamic like you have today, where the market has been extremely volatile, when you’ve had these intense swings in both directions now, but you have an economy that’s crumbling and people’s personal finances being upended, it’s super dangerous because what you don’t want is for people to take the money that they need to live or pay their bills, or take care of their family and try to invest it in the stock market to make a quick buck, that is the easiest way to get burned.
Jonathan: You mentioned that you have experts rating the best online brokerage firms, et cetera, which I think is a great service to have, but they’re also some of those are your biggest advertisers. How do you separate church and state there?
Caleb: Great question. They are our biggest advertisers. They’re our biggest advertisers because our readers are interested in investing and usually convert and sign up. They’re our biggest advertisers for a reason. When it comes to product and platform reviews, we are completely editorially-focused on that.
[00:26:00] There is no pay to play. You can’t pay to get more stars from us. We review them with our experts who have been doing this for 25 to 30 years, reviewing online broker platforms, completely objective and separated from advertising.
Our biggest advertisers are not necessarily our best online brokers in terms of our rankings and that’s proof that we don’t favor anybody when it comes to that. We have to be completely objective and that’s what our readers expect from us. The minute we cross that line, Jon, whether it’s in this or anything, giving stock picks or doing things that are disingenuous to the mission of educating investors, is the minute our business falls apart in everything that we’ve built over the last 21 years falls apart and fades away.
Jonathan: It’s rare in someone’s career to work for one media mogul. You’ve had the opportunity to work for two, currently, your sites owned by IAC, which is controlled by Barry Diller and his family. You worked at Bloomberg, which was obviously controlled by Michael Bloomberg. They seem to be very different personalities, but I imagine there’s some similarities too. Is there a way you can compare and contrast them?
Caleb: That’s a good question. Well, I’ll tell you what, I was a very young man in my video production business. When I was 21 or 22, I was at National Association of Broadcasters show. I saw Michael Bloomberg for the first time, never even heard about the man. I’m from New Mexico so I didn’t really know what was happening with the New York finance scene. I saw him speak about the future. This is about 1993.
He was talking about, one day we won’t have newspapers, or we might publish what we’ll really have is some a tablet where we’ll touch things and new pages of the newspaper would come up. He started talking in those types of terms. I said to myself, “I want to go work for that guy. That man sees around corners, I want to get to know what he knows and his view of the world. Funny enough, I ended up working for him several years later and he’s super intense.
When you go to work at Bloomberg, you go into your first day in orientation, everybody had to meet Michael Bloomberg at his desk in the middle of the
[00:28:00] newsroom, in the middle of the TV newsroom, right there with everybody else, no office, sitting out there on the open. You line up the medium in a parade of about 20 people and then it’s your turn, Michael’s working on his Bloomberg or he’s writing something.
He looks up at you and your orientation person says, “Hey Mike, this is Caleb. He’s going to go work as a TV producer for Bloomberg TV. This is his first day.” Mike looks up at you and says, “Don’t F it up,” and looks down and when you moved on, Mike was tough like that. Years later, I was covering business news for CNN and we started reading about Barry Diller and how he had chartered this career from the movie business and from USA networks and into QVC and Expedia and all of these businesses that he created in this whole notion of businesses that are marketplaces and matchmaking places, of course IAC owns match.
I said, “That’s a very fascinating person with a really interesting view of the world, running a company that is building the future on these electronic and digital platforms. I want to work for them someday.” Luckily enough, there was an opening at Investopedia at the right time in my career and I got to do that. I don’t have a lot of exposure to Mr. Diller, but I do have a tremendous amount of respect for him and the team that he’s built.
Jonathan: Caleb, thank you so much for your time. I really learned a lot from the state of business journalism, how to get your website to the top of Google. I really encourage our listeners to visit Investopedia. I truly think it’s a great site to learn more about investing.
Caleb: Jon, thank you. It’s been a pleasure and we appreciate your partnership and your friendship with the site and the work that you do. It’s an honor to be here. I really appreciate you inviting me on to the podcast.
Jonathan: To be sure to never miss another episode of the World According to Boyar, please follow us on Twitter @boyarvalue. Until next time.