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Business Folk

Most, if not all, annual reports for 2013 have been published by now, and as investors attempt to glean what went right and what went wrong by wading through pages upon pages of corporate detritus, often the most readable section is that containing the shareholder letter.

Warren Buffet is arguably the most famous writer of shareholder letters because of his folksy, straight-to-the point style.  Buffet is so darn good at writing shareholder letters that myriad chairmen and chief executive officers attempt to emulate his knack for prose. The problem is, Buffet writes in his own voice, and trying to inject his vernacular into your shareholder letter could smack of inauthenticity, or even worse, someone might call you a poser.

Instead of invoking Buffet when trying to conjure up some down-home writing, l’d rather refer to his style as “business folk.”  Yes, it sounds like a music genre for MBAs.  But writing in the style of “business folk” seems a lot less intimidating than trying to emulate a genius.

Following are additional word-buffing tips:

    • Avoid clichés and creative analogies.  Yes, it is tempting to use catch phrases and descriptors to tell the company’s story, but words can easily become distracting, and soon enough the reader loses focus.

 

    • Write as quickly as possible.  This ensures you are writing what you know and staying on point.  It also helps lay a foundation that you can wordsmith later.

 

    • Use metrics that help demonstrate themes.  Numbers are great because they are hard facts, but they also pose challenges because they don’t always tell the full story.  Try to use numbers that help shareholders understand the overall direction of the company.

 

    • Describe the company’s strategic direction.  Many executives underestimate the power of writing and misuse the activity, particularly in shareholder letters, to recapitulate old news.  Effective writing presents a roadmap that can help manage expectations, as well as demonstrate leadership.

 

    • Read what you write out loud to determine if it actually sounds like something you would say.  If you employ a lot of three-syllable words in your daily conversations, then maybe your writing should contain three-syllable words.  (Note: If expletives factor into your daily conversations, then you should edit those out.)

 

    • Use subheads to break up thoughts.  It is easy for readers to get lost in corporate minutiae, which is why it is helpful to have guideposts.  Subheads help hammer home themes we want investor audiences to remember.

 

    • Make sure whatever you write is in reader-friendly formats both online and in print.

 

    • Words are more important than flashy design.  Sure, an interactive quarterly report is nice, but it’s the words that will help investors determine if you have “a wonderful company at a fair price (rather) than a fair company at a wonderful price,” according to a quote from Warren Buffet’s shareholder letter in 1989.

 

– Evan Pondel, epondel@pondel.com

Q&A with L.A. Business Journal Reporter

Business reporters play an important role in helping investors identify opportunities. PondelWilkinson caught up with James Rufus Koren, staff reporter of the Los Angeles Business Journal, to shed light on factors that influence his coverage of the banking and finance world.

 

James Rufus Koren, reporter with L.A. Business Journal

James Rufus Koren, reporter with L.A. Business Journal

1. How are social media influencing your coverage of companies?

 

I don’t know that it has changed the game that terribly much because of the type of niche business publication we are. We don’t do a lot of breaking news. We are looking for the analysis story; the exclusive deep read on what’s going on.  I also don’t find social media the best way to get information about banks. The three sentences at the bottom of a 10K are usually much more insightful. That said, if we are looking for a lead, I will search through Twitter to see if anyone is tweeting about a company or I’ll read blogs to see if anyone is talking about a company.

 

2. What characteristics make for a compelling story in the Los Angeles Business Journal?

 

Growth, change and new strategies that speak to the local economy are interesting to me. Big names are also interesting. For example, if Charlie Munger is doing something, we will probably be more interested than if Evan Pondel is doing something (laughter). But often times, what interests me may not interest another reporter. I like to explore parts of the banking and finance world that are not well understood. I look for things that I don’t understand and then try to take a crack at it.

 

3. How would you define an ideal source?

 

An ideal source is someone who is deeply in the know not just about their company or their particular corner of the world but also has a broader knowledge base and a big Rolodex. It’s very helpful when someone can say, ‘hey there is something interesting going on here that you should look at,’ such as a particular sector of the economy. An ideal source is someone who will give you information without the expectation that it will result in something immediate, or something positive for them.

 

4. How do you like to be approached about prospective stories?

 

In general, email is the easiest, but the ideal approach is developing a relationship with me. If you have been helpful in arranging interviews, I am more likely to follow up on story ideas. Sending gifts does not ensure a good story. A number of interesting things come into this office. Thankfully, no one has sent me a fish wrapped in a newspaper.

 

5. Where do you foresee the future of business journalism going?

 

I actually see business journalism continuing to connect with people in more real ways than other kinds of journalism. Many people have a hard time seeing the direct impact of stories about state and local politics, but people who read business stories want information so they can make wise decisions about their money.

 

6. How do you react when a call is not returned?

 

It depends on the information I left in a message. In general, I interpret it as the person has nothing to say for themselves, or that I have things pegged well enough in a story and the person cannot benefit from getting in touch with me. Also, as a business journalist, I understand the limitations of public companies and that certain things cannot be disclosed.

 

– Evan Pondel, epondel@pondel.com

 

Video Killed the Radio Star

How much is a YouTube view really worth if the view comes from hiring a marketing firm?  Earlier this month, the L.A. Times reported that Los Angeles City Atty. Carmen Trutanich paid for YouTube views for his campaign videos promoting his run for district attorney.
 
His videos boasted 725,000 views, with the most popular clip surpassing any campaign video from GOP presidential candidate Mitt Romney, Newt Gingrich or Rick Santorum, according to the Times.
 
Sounds like payola to me.  But I wonder if some videos need “primer” views to promote organic views. Consider the psychological effects of viewing a clip with tens of thousands of views versus a couple dozen.   The more people that view a clip the more likely other people will view the same clip.  Before you know it, the video goes “viral” and begins to prompt some sort of social movement.  And then, perhaps, a politician is elected, a brand gets sticky, or a warlord is overthrown.
 
By now, many of us have heard about the Invisible Children video that net almost 80 million views in about a week.  Are all of these views organic?  Beats me, but the video’s content is very compelling and probably could have drummed up at least a million views without any help from fluffers.

Video Views

YouTube Video Views

 
The bottom line is that the digital world values transparency, and if you are going to hire a marketing firm to bolster views, perhaps disclosing this fact in the first few seconds of the video would actually enhance the credibility of your message.  After all, it’s a lot easier to disclose upfront that you are artificially inflating video views, as opposed to suffering the consequences of someone else, i.e. the media, disclosing this fact.
 
Even better yet, how about producing video content that is actually worthy of bona fide viewership?

 

– Evan Pondel, epondel@pondel.com