Moving forward with my newsletter
I have been thinking a lot about what to do with my newsletter ever since I did the post, “Links…to everything,” where I declared I won’t be aggregating news anymore but will be focusing instead on insights about specific companies. The first of these insights was my writeup on Raksul.
Most newsletters are difficult to monetize
The reason why I stopped aggregating news was because I figured that it will never be monetized. I can’t imagine charging anyone even $5 per month for news, while you can subscribe to Nikkei Asia for $9.99 per month or, even better, read free insights on Substack, such as by Will Shoebs’ Japan Business Insights.
The elusive long tail in the creator economy
In “The Creator Economy Needs a Middle Class,” Li Jin (@ljin18) who is a VC, says, “For content platforms, the move to digital content hasn’t been correlated with a burgeoning long tail: the top creators are massively successful, while long-tail creators are barely getting by.” The article entitled “The Million Dollar Newsletter” which is about Packy McCormick’s hugely successful Substack, Not Boring, is no more than a fantasy or pipe dream for the average newsletter.
The huge gap between amateurs and professionals
Signalfire, a San Francisco-based VC, has posted a resourceful blog post on the Creator Economy, “Creator Economy Market Map.” The post says, “More than 50 million people around the world consider themselves creators.” “So how did creatorship grow so quickly? There’s been a societal shift in consciousness towards caring more about feeling fulfilled in our jobs, having control over how we spend our time.” But the reality is stark, as most creators will never make it to becoming professionals, as shown in the image below.
Just a few sentences about myself (please bear with me). My name is Teddy Okuyama (34 yrs old). I’m a freelance translator from Japanese to English. I was born in Hawaii, raised in California, and moved to Japan in 2015 after marrying my Japanese wife. Around that time, I came to a crucial realization that it will be hard to make a living from translation because of rapid improvements in AI.
How I got into equity research
I started looking for a niche. And, in January 2018, I landed a job at Mitsubishi UFJ Morgan Stanley Securities as an equity research translator. I knew nothing about finance back then. I started out by learning how to read a balance sheet. I soon came to know about MIFID II and the unbundling of equity research from sales, and started questioning why there wasn’t much coverage about small caps.
And how I soon quit
I knew the freedom of being a freelancer, and couldn’t bear the politics, so I quit Mitsubishi at the end of my probationary period and one-year contract. Ever since, I’ve been translating for investor relations firms.
Newsletter as a segue to a new career
Translation is not a sustainable career. Machine translation is improving at an incredible pace. And there’s way too many people who are bilingual. Translation rates have been falling because of competition from translators in developing countries like the Philippines. That’s why I started this newsletter. In short, I’m trying to pave the path toward a new career through this newsletter.
Three types of sell-side analysts
Here are some of my blunt thoughts about sell-side analysts. There are three types of analysts, in my view: first, there are just ordinary analysts who merely devise earnings forecasts; second, there are expert analysts who are highly knowledgeable about the industry, but without a matching talent in terms of stock prices; third, there are influential analysts who possess both industry expertise and market knowledge, thereby often having an impact on markets.
Five flaws of sell-side research
I noticed there were some flaws in sell-side research. The first flaw is that there are many ordinary analysts who are neither experts nor are influential. The second flaw is that it tends to be an ivory tower detached from investing. Third, there are conflicts of interest between research, sales, and investment banking. Fourth, there’s not enough coverage of small caps. Fifth, insights start lacking in diversity and substance likely because analysts are stuck in the ivory tower.
Am I just a fake wannabe-analyst?
In contrast to sell-side research, I provide niche insights that are on-the-ground and come from my own experience of living and investing in Japan. What I write is a “song of myself,” just as Walt Whitman says, “I celebrate myself, and sing myself, / And what I assume you shall assume, / For every atom belonging to me as good belongs to you.” On top of that, I’m primarily interested in small cap software stocks, which often have zero or limited coverage by analysts.
On becoming a professional creator in finance
Here’s my plan on how I’ll break out of being a translator and becoming a professional creator in finance. I don’t believe in monetizing a newsletter on Substack. Nor do I believe in monetizing other creator platforms like Clubhouse. That’s only for a handful of star creators. This newsletter will always be free.
200 newsletters will turn into a book
Starting tomorrow, I’m going to write one-two pages each on Japanese small cap stocks for 200 days. These one-two pagers will all be free. But, at the end of the 200 days, I’ll refine these posts and will compile them into a book. I will publish that book and brand it as something like a Handbook of Japanese Small Caps.
Rebranding myself as an author and consultant
As an author of that book, I would no longer be just another translator. Instead, I would become an expert on Japanese small caps (especially software stocks). From there, I would launch some backend services like consulting. In short, neither the newsletter nor book are the money-makers. The bread and butter will come at the very end, when I rebrand myself as an author and consultant.
Setting an example of a creator middle class
I will dub this my 200-day challenge. At the end of 200 days of newsletters, I will start the process of turning them into a book. Within a year, I would become a published author. Within two years, I would start making money as a consultant. I think this would be one example of a “creator middle class.”