Merryn Somerset Webb: What I learned from Japan’s bear market
Merryn Somerset Webb explains how her time dealing securities in Japan laid the foundations for a career in financial journalism – and the creation of MoneyWeek magazine.
We'vespent a lot of time recently interviewing MoneyWeek's main writers, writes John Stepek,delving into their backgrounds, their thought processes, and the big influences on their careers. We'll bring you those interviews over this Christmas period.
We start off with a woman you'll all be familiar with Merryn Somerset Webb, editor-in-chief of MoneyWeek magazine.
I've been working with Merryn for just over ten years now. You don't need me to tell you this, but I will anyway - she's one of the very best financial writers out there. Her ability to cut to the core of a complex argument and to communicate what's really important to a reader who doesn't work in the City, is second to none.
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Take it away, Merryn
Q: Your earliest professional experience was working in Tokyo as a producer of programmes for NHK, the Japanese broadcaster. How did that come about?
A: I first went to Japan as a Daiwa scholar with the Daiwa Anglo-Japanese Foundation a charitable organisation set up by a Mr [Yoshitoki] Chino, who was chair of Daiwa Securities back in the early 1990s. The idea was to enhance relations between the UK and Japan in every possible way, given that we have very similar island cultures. Chino San [Mr Chino] was very much an Anglophile, and he wanted to enhance these connections.
As Daiwa scholars, in my day, we went to SOAS [The School of Oriental and African Studies, University of London] and learned Japanese. Then we went out to Japan. Today, we send the five or six scholars we take on every year [at the Daiwa Anglo-Japanese Foundation] straight out to Japan, and they learn on the ground.
When I was a Daiwa scholar, you learned Japanese for the first year, and in the second year, the Daiwa Foundation helped place you in a company that you found interesting, or were interested in working for. At the time, I asked to be placed at a media company of some kind, so they put me at NHK, which is basically the equivalent of the BBC.
Q: How did you find the experience of working for NHK, and the experience of working in Japan, especially as a woman?
A: It's different when you're a foreigner.
When you're a foreign woman, you're not the same as a Japanese woman, in general, in terms of the way people approach you. You're already different, and available to be discriminated against, because you're white. So being a woman is just an added extra.
Is it an odd environment to work in? Yes, absolutely. Is it very sexist? Absolutely. Is it different to working in the UK? Yes, very much. For starters, everyone smokes all the time!
One of the strange things about NHK back then I imagine it's the same now is that people don't do very much. There are an awful lot of employees. It's like the BBC sending 274 people to Glastonbury. NHK has 500 people sitting in its international office making very few programmes. So there's an awful lot of sitting around.
One of my very early jobs was to flip through the English papers and find interesting media-related stories which I thought the Japanese would be interested in, then to photocopy them onto paper and pass them around to the executives. Everyone was desperate for these bits of paper to arrive so they had something to do and looked like they were busy.
But it was an interesting experience. I worked on various news programmes, and I enjoyed it not enough actually to decide to stay in television media. And I've pretty much tried to avoid doing television since, although I have ended up doing quite a lot of it. It's incredibly boring.
Q: You don't like the moving image side of things?
A: I don't like the process of making it. Being interviewed on live television is fine like being interviewed anywhere. But actuallymakingtelevision is unbelievably slow and boring. The series I made for Channel 4, SuperScrimpers, was probably one of the most excruciatingly awful experiences of my life. And I will never, ever make a television series again.
Q: How is your Japanese now? Still pretty fluent, I imagine?
A: My Japanese now is not very good. It was excellent. I worked entirely in Japanese.
I have a lot of friends who I made back then. Then, our language to speak to each other was Japanese. But over the years, my Japanese has declined, their English has improved, and we're now mostly communicating in English.
It's unfortunate, given that the Nikkei has just bought the FT. I'd like to be able to speak to my new colleagues in Japanese. But I think it's one of those things like driving, riding horses etc: It will probably come back if I tried.
I go to Japan once every second year now. I go with Daiwa Securities, we take the occasional trip. I'm also on the board of a Japanese investment trust. We go over on a trip every couple of years as well.
Q: While we're on the subject, what do you think of the Financial Times buyout by Nikkei?
A: I'm really pleased to see Japanese companies looking outwards again, for starters. It's a nice thing to see. We've been worried for years that the Japanese are becoming more inward-looking. You see fewer and fewer tourists leaving Japan, fewer and fewer students leaving Japan to study abroad, etc. Any big outward-looking takeover is great.
As to who owns the FT, their previous owners weren't very keen on them. Anyone who's paid that amount of money for them is going to hopefully try and develop the brand better and more. So I think it's good.
Q: You don't have fears that the Japanese will try to influence it in any way, or give it an orientation of some kind, especially in Asian coverage?
A: Probably, but find me a proprietor who doesn't. Which owner wouldn't have done that? If they had been bought by the German company, we would have been worried that the paper would have a German slant in Europe. These worries are entirely standard. Will it happen or not? I haven't got the faintest idea. But I don't think it's any more of a risk with Nikkei than another buyer. And they've made pretty clear statements on it.
Q: After NHK, you went on to work with SBC Warburg in Japan. Was that more interesting?
A: NHK was interesting, it just wasn't a career I wanted to follow.
My time in Japan working for institutional organisations was amazing, because it was the time of the great market unwinding, the banking crisis, etc. It was absolutely fascinating. I was working at the time with James Ferguson, who writes forMoneyWeeka lot now. He was one of the clearest articulators of the way that the banking crisis would unfold in the West, because he had experienced it in Japan. I was there with him during that time. We both had much more of an understanding of how things would unfold in the West as a result of having watched them unfold in Japan.
Q: What happened when you came back to the UK?
A: I started writing the City pages ofThe Weekpart-time, and I went back into broking for Paribas, which then merged with BNP.
Q: Did you like broking for Paribas? You can't have liked it that much, since you went into journalism soon afterwards.
A: It was different working in a dead market.
In Japan, I was still doing Japanese equities. I was working on a live market, and of course there was the excitement of the markets moving around you, of talking to people in real time, etc. When you're working in London broking, the Japanese market is closed people are talking about a market that's already closed. So there's no movement. It's an incredibly boring business.
I could have moved over to another market. But as it happened, I had already met Jon [Jolyon] Connell, and we'd decided to launchMoneyWeek.
Q: What was the spark for that? You saw that there was a niche, a need for a financial publication of that kind in the UK?
A: There was definitely a need for it. At the time there was a huge amount of publicly available financial information, and increasing volumes because of the dotcom bubbles. There were hundreds of new publications and online publications and newsletters and tech-specific magazines pouring out stuff. And all of the newspapers started having special supplements on investing, special supplements on technology, etc.
It was mostly nonsense, badly done, very PR-driven, etc a huge amount of information, most of which was of very little use. What investors weren't getting was the information that they really needed: about what actually drives return, about charging structures, etc.
The idea, when we first launchedMoneyWeek,was that it should be a digest of the best, so that people only saw the best information. And that didn't really work very well. One of the things that neither Jon nor I really understood when we launched the magazine was how little people really understand about money.
WithThe Week,which is a political magazine, it's very easy to purely digest. You can say, "This happened, here's what the people onThe Telegraphthink about it, here's what the people inThe Guardianthink about it", and then you can just shut up, because people have their preconceptions already. They have their prejudices. They already know if they're going to agree withThe GuardianorThe Telegraph. They just want to know the arguments. Their final conclusion is not in doubt.
When it comes to money, it's completely different, because people don't have prejudices. They don't have pre-formed opinions. They don't have preconceptions. So you can say to them, "So-and- so says you should buy gold, so-and-so says you shouldn't buy gold". But you can't just leave them to make their own mind up. You have to come up with a final decision for them.
In the end, the only way thatMoneyWeekworked was when we decided to inject large amounts of opinion into it: "So-and-so says you should buy gold. So-and-so says you should sell gold. So-and-so, the first guy, is an idiot. You have to listen to the second guy, because he's the one that knows. And actually, when it comes down to it, I'm the one who knows, because I'm telling you that that's the guy who knows."
It was only when we took command of the whole thing, took control of the opinion, took control of telling people exactly what they should do in our own voices, that the magazine became a success. You cannot digest money, as it turns out.
Q:MoneyWeekis a success. It's now the number one financial weekly in the UK. That must give you satisfaction, since you were at the origin of it.
A: Absolutely. It gives me great satisfaction to have moved forward so quickly in 15 years. Taking overThe Investors Chroniclewas a happy day. Interestingly, I thought 50,000 would be about where we would stop. I suspect that with pensions freedom, we'll see much more growth in the next few years, because the environment around us has changed very dramatically in the last few years.
There are two things involved in getting a magazine going. The first is good editorial and we do have good, interesting editorial, and slightly different editorial. The other is marketing.MoneyWeekis marketed in a relatively unusual way for a magazine, and that's something that our readers have found very compelling over the years.
Q: Is there something that you feelMoneyWeekshould be doing that it's not doing right now?
A: I think there's room for constant editorial improvement, and there are lots of campaigns that I'd like to run. We want to do much more on pensions: on how you finance retirement and how you finance the run-up to retirement, how you accumulate and then how you de-cumulate. It's a fascinating area that the UK financial industry has not got on top of nearly as fast as I expected they would, post pensions freedom. So there's a lot to be done there.
Q: What was the impulse behind your book,Love Is Not Enough: A Smart Woman's Guide to Money? Publishers came to you and asked you to do it?
A: When you edit a magazine, there are endless publishers knocking around, asking, "Write this, write that". But writing books is a thankless activity. There's no money in it any more, so you really have to feel quite strongly about something to be bothered.
Writing about women and money is something I've wanted to do for a while. I'm maddened by lots of my successful professional friends who are lawyers, accountants, businesswomen, even fund managers, and who don't know what an Isa is who have no sense of how to manage their own money, and no real sense that they should manage their own money. It's a funny thing. Even the most feminist of women will shut their eyes and pretend they can't hear you talking when you start talking about their pensions, their Isa, their general financial management.
Q: I presume that there are also men in your acquaintance who are a bit lost as well. But you chose to aim the book at a female audience?
A: A lot of men are absolutely hopeless, but they don't have the same sense that it's not their problem, which women have, and which is incredibly irritating in this day and age.
Q: Do you have other books coming up?
A: I may update that book. But I think the odds of writing another one are pretty remote. I have too much to do.MoneyWeekis still an awful lot of work. I still have my column in theFinancial Times.I have two directorships, a charity board, and of course children. So another book is going to have to wait until the children have grown up or everybody else fires me.
Q: Are you optimistic about the future of MoneyWeek?
A: I think that there is a fabulous opportunity in this market for anyone that has a good brand. People are desperate for information that they can trust. They're desperate for people that they can trust. The responsibility people now have to take for their future is entirely different from the responsibility they had to take for their future even a few years ago, when all you had to do was earn a salary, and you'd get a final-salary pension at the end, or save money into your company pension, and then you would at the end receive an annuity of some kind. And once you got the annuity, your side of the deal was done. Responsibility finished.
That no longer exists. People will have 30 or 40 years' worth of having to manage their own money and having to work for themselves. Where the money goes and where the money comes from: that's an entirely different kettle of fish. And that's where I think there is a huge opportunity for businesses like ours.
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