Neil Woodford launches an expensive new website

Don't call it a blog

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Naturally, when former fund manager Neil Woodford publicly resurfaced with a defiant new blog, the press was going to cover it. Despite facing FCA plans to take action against him, he's emerged with a new platform, Woodford Views, promising uncensored economic analysis and commentary.

The press pored over the first post, and pointedly quoted the bit where he says he was "neither hero nor villain" in his fund's debacle. (In Treasure Corner today, we look at the stories fund managers tell themselves about their work.)

But I paused on a different wording choice. The press generally described this new digital object as a 'blog'.

Because of the FinText analytics app, which ingests and compares investment content from managers and news outlets, I have spent my fair share of time examining various website choices. I can tell you, this is not a blog.

We forget how savvy Woodford had been pre-fund-collapse, in both marketing and distribution. Indeed, he understands the two are one and the same. The clues that this is a business venture are plastered all over.

1. The website. It's built with Webflow, a low-code platform that can produce sharply-designed sites. The running costs should come at around £250 a year. You'll want to throw in an additional few hundred pounds for the initial design. None of this is the expensive part.

2. The content. Since the initial post there have been two others (dissecting the ailing state of the UK market). The written posts are laden with infographics. It makes for a visually appealing experience, but few would stop to consider the costs involved.

The pieces aren't long, and I can believe Woodford is doing his own writing; the tone is decidedly personal. But research has gone into them, for data. Then a designer had to step in, creating the infographics. Whoever was writing the piece had to give pretty specific directions on what they wanted. There would have been rounds of edits.

Anyone can launch a blog, and put their heart and soul into the first few posts.

What's hard is sustaining the effort over time. In most investment management companies, including the one Woodford had, a team of creators carries out this effort, essentially forming a production facility.

Though the website has only been up for a week or so, you can already sense the reality sinking in: compare the level of ambition in the first analysis post infographics with those in the subsequent one, and you can see the scale back.

You'd be surprised how often companies — in any sector, not just investments — don't realise how costly it is to just keep writing. FinText has surveyed a landscape of several hundred companies. I'll talk about the results at a later time, but the crux of it is, there are only three ways this game plays out:

• One, which is common for small scale companies, is they become overwhelmed by the amount of work. They start posting more frugally, or stop altogether.

• Two, the opposite happens. Someone takes it up as a mission, carving time out of whatever they were doing before, to put in the required effort.

• Three, spending money. They bring on a writer/researcher with enough domain expertise to pull data and take care of the back-and forth with whoever's doing the design.

How will it play out in Woodford’s case?

The first option is dead on arrival. Had Woodford really wanted a 'blog' to post his musings, he wouldn't have bothered as much as he has. Technically, nothing is barring Woodford from launching a new investment company, and he fiercely intends to litigate any FCA effort to place the blame squarely with himself. This website is a business launch.

The second possibility is even more far fetched. In both age and affluence, Woodford is at a stage in life where time is worth significantly more to him than money. He’s not about to devote large chunks of it to the hassles of "content creation"!

This leaves us with the third possibility. Whether Woodford has already hired anyone or will do so within the next few months hardly matters.

The point is that to relaunch the product that is "Neil Woodford", one of the very first meaningful expenditures would need to be a person (or persons) to deal with the difficulty of steadily creating marketing.

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Treasure corner: The stories fund managers tell themselves

The fund industry’s implicit promise to clients is that it is possible to “beat the market”. This despite all participants knowing it’s near impossible to do on a consistent basis.

So one study finally asked: how do professional investors manage to maintain feelings of self-esteem and self-legitimacy when they know they can’t all be “exceptional”?

In Heroes and Victims: Fund Manager Sense-making, Self-legitimation and Storytelling (by Arman Eshraghi and Richard Taffler) the answer is clear: they tell themselves stories.

The study analyses the transcripts of interviews with fifty equity fund managers in some of the world's largest investment houses. It also looked at a similar number of published reports to their investors. Based off these:

“In both cases, we show how storytelling is used by asset managers to make sense of what they do and justify their value to themselves as well their clients and employers.

…Being able to tell a convincing story to himself and others about why things did not work out as expected ensures the fund manager can avoid acknowledging the underlying uncertainty with which he has to deal.”

Not just any stories. The researchers found that most of the stories managers told fell into two genres:

• Epic: with the fund manager as ‘hero’ when things work out.

• Tragic: with the fund manager as ‘undeserving victim’ when things go wrong.

And they point out that these stories have a very significant feature:

“Because of the way fund managers are able to explain (away) such outcomes with plausible stories, they do not appear “to threaten their meta-narratives or underlying investment credo.”

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Also Happening

• Norway's $1.6 trillion wealth fund is backing a push to separate the roles of CEO and chair at Goldman Sachs. Both roles are currently held by David Solomon. Unsurprisingly, Goldman Sachs is objecting, and the resolution is unlikely to pass (a similar attempt last year, which NBIM also supported, got 16% of the vote.)

What's interesting here is the white space. Notice NBIM is not pursuing the same agenda for JP Morgan, where Jamie Dimon holds the two titular roles.

When recently covering how JP Morgan's stock has risen much more than Goldman's over the past year, we mentioned the proxy measure of Google search frequency:

"Google search volumes for (Jamie Dimon's) name hit an annual high of nearly 460,000 searches, four times higher than the usual rate...Goldman’s CEO, David Solomon, is probably as well-informed…but far fewer people care. Weekly search volumes for his name hover at around 8000."

• Netflix will stop reporting subscriber numbers starting in 2025. The company said it will announce “major subscriber milestones as we cross them” but will cease disclosing quarterly subscriber numbers.

In the earnings call, Co-CEO Greg Peters said the reason for this change was that the number of subscribers has been a decreasingly relevant measure for the health of the business. Instead, the company is finding higher engagement is tied to higher revenue per member, especially as Netflix plans to roll out more advertising.