Jacob Wolinsky | Founder of ValueWalk
Success leaves clues.
Finance Strategists sat down with Jacob Wolinsky of Value Walk, a website dedicated to educating the public about practical stock investing and lesser known stock options. He discussed what led him to create Value Walk, as well as the insight he gained from running the business.
Who is Jacob Wolinsky?
Q: Who are you and what’s your background?
I grew up in Suffern New York, a beautiful rural type of suburb about 30 miles from New York City. My father came from a very poor family of eastern European immigrants (more on that below) who always encouraged him to study and try hard. He passed that on to me and sent us to very good private schools. After high school I was thinking of accepting an admission to George Washington University. Instead, I decided to study abroad for a few years. I was an accounting student but graduated with a degree in business development from Fairleigh Dickinson University. Around that time I got married and started working in the investment industry.
Q: Who has been your biggest influence, and why did they have such a significant effect on you?
My grandparents. My father’s parents used to always stay over and my father, being a doctor, would not be home much. My grandfather would sleep in my room and tell me stories about his time in the Siberian gulag, fighting on the Eastern front in WWII and his poverty growing up in Poland.
The most important lesson was to be grateful for what you have and not to waste assets, especially food. My grandmother’s mother died of starvation during WWII as she gave the last scraps of her food to my great aunt. They taught me to realize how lucky I was to grow up in America, and just 40 years after the horrors of WWII finally ended.
To apply to finance, there are countless stories of very wealthy people (who have more than enough to never work again and live a nice life) blowing away vast fortunes. If you do not have the right mindset, no matter how smart you are, you will have trouble budgeting and with investing.
Q: Knowing what you know now, what would you have told yourself when you were in your twenties?
While it’s nice to have the informal approach to starting a business, you need to make sure that you understand all the guidelines and regulations. I meet many business owners who are run by smart and successful people but who never looked up certain laws related to trademarks for example. Small accidental errors could cost a ton of money and wipe you out overnight. I cannot stress how important it is. Success often attracts lawsuit trolls, so you need to make sure you know all the Federal and state guidelines that are applicable. It is also good to regularly follow up with attorneys and to pay attention to any changes which may impact your operations. I wish I had known some of this earlier but the good thing is that now I do.
What is ValueWalk?
Q: What is ValueWalk?
Valuewalk is a financial information media outlet with a focus on value investing and hedge funds. While we don’t dispense any actual investing advice, we focus on long term wealth building strategies. In the beginning we were posting deep value focused philosophy and stock ideas, over time we have developed excellent contacts in the hedge fund industry and do a lot of reporting there.
We have free content, a subscription product, and a small cap newsletter. We also have expanded beyond text and have regular podcast episodes with industry experts.
To give a more balanced picture we do a lot of personal finance. Our readers tend to be very sophisticated investors, many working at hedge funds, family offices and the like – so do they need to hear about savings and things like that? 100% – even the wealthiest sector of America has a vital need for quality information on how to budget. Otherwise, many who make it rich do not last long.
Q: What makes your company different from its competitors?
I think one thing that makes us stand out is having a balanced approach which most outlets, by their nature, cannot do. Small websites maintain a less rigorous (if any) editorial process and mostly publish opinion pieces. Big sites do investigative pieces but are hampered by other considerations on topic and length. For example, some of the big financial media outlets will only do stories on major hedge funds. But there are 8000 small funds that are getting almost no coverage from anyone. At Valuewalk we do not ignore these and have done some investigative pieces on what is going on behind the scenes. I like the flexibility of having leeway over what our writers can cover while maintaining a very professional publication standard.
Q: What led you to start ValueWalk?
I started Valuewalk as a hobby. I never expected to do it full time. 10 years ago, I started reading a lot about investing and wanted to share my thoughts for myself. I started Valuewalk and freelance posting on some investing sites. After one of my first articles on a big investing forum, I got an email from a very famous author telling me how much she liked my article. That got me motivated as I saw people were reading what I was saying.
Everything I did was very complimentary to what I was writing about at Valuewalk. I worked for the next few years as a stock analyst and in hedge fund business development and would blog on the side. While I was a stock analyst, if I researched a company that my boss was not interested in, I would post my thoughts on Valuewalk. I also discussed personal finance, how to have a proper investment mindset, etc.
Around 2011, I was deciding what to do next. Valuewalk was attracting almost 100,000 visitors a month and making a small profit with no expenses. I told my wife I wanted to try it full time, and she thought I was crazy. She was probably right but I made my first hires and went from there turning it into a full time job.
So unlike awesome, very hyper focused businesses, this all came about by accident.
Q: What has the experience of building the business taught you?
Running a company is much harder than it seems. There are some big corporations out there where you have to scratch your head and wonder what management is thinking, but most of the time it is not always obvious and executing is much harder than it looks.
When I see these big companies like Amazon that just grow revenue year after year I am amazed. Even for a small company which is only in a tiny market, to constantly retain and even grow profits is very hard. But for these mammoth companies, it seems nearly impossible. When I see a corporation like Amazon grow nonstop I just do not understand how they do it.
Running a company really is an important aspect to understanding how stock investing works. When you buy a stock it’s not just a piece of paper but an ownership stake in a real firm. When you are a founder and wear 10 hats and have to balance a budget, hire, grow you realize how humbling the process is.
Q: Where do you see things headed for you in the next 5 years?
I would like to retire and spend more time with my four kids, but that seems unlikely any time soon!
I would like us to continue focusing more on personal finance. All the pundits on TV and all the major newspapers love discussing hot stocks. But as I mentioned earlier, you need the foundations before you can even start looking into stocks. The building blocks include budgeting well and starting to save money. This is a nationwide crisis as so many Americans have so little savings and a lot of credit card, mortgage, and student loan debt. The country would be better off if the financial media focused more on reducing credit card debt than what Apple stock will do this year. We hope to continue that ValueWalk will fill this void.