The Next Chapter of Value Investing Substack
Why This Newsletter Is Switching to US Stock Coverage
Value Investing Substack first went paid over a year ago in Oct 2021 — and in that time, over 30 paid stock reports have been written to democratize access to stocks in the Southeast Asia (SEA) region. As demonstrated in the chart above, those 30+ stocks generated an aggregate return of +16.6% on an equally weighted basis (+21.2% without shorts) in the 16-month period from Oct 2021 → Jan 2023.
The task of discovering undervalued well-run businesses in SEA has genuinely sparked joy in me over the past year. However, after much thoughtful consideration, I’ve determined that there will be 3 major changes to this newsletter going forward:
3 MAJOR CHANGES:
The regional focus of this newsletter will shift from S.E.A. stocks → US stocks (including US-listed ADRs)
The monthly frequency of stock reports will switch from 2x → 1x monthly
This newsletter will raise its prices from $10 → $30 monthly and $99 → $199 annually on May 1:
However, all new & existing subscribers will be automatically grandfathered into the old $10/mth plan into perpetuity if they have a subscription before May 1! (no action required on your part)
Existing subscribers can also request a pro-rated REFUND if they wish before May 1 (any refund requests after May 1 will only be given at the discretion of the author)
If you’d like to submit a request for a pro-rated refund before May 1, just let me know the email address which you used to subscribe to this newsletter via one of the three methods below — so that I can verify that you have an existing subscription and process the refund. Due to timezone differences, please allow me up to 24 hours to process your refund request — you shall receive a response to your request as confirmation once your refund has been processed. Thank you for your understanding.
Tell me your email to submit a refund request! Click one of the buttons below to begin:
WHY SHIFT FROM S.E.A. STOCK → US STOCK COVERAGE?
Value Investing Substack started in Oct 2021 with the ambition of bringing under-the-radar high-performing Southeast Asian (SEA) businesses to the attention of EM investors worldwide, amidst a low-yield ‘TINA’ environment in developing markets. What I couldn’t have known at the time was that the absolute peak of US/DM market valuations was in Oct 2021 — and when the 2021 Tech bubble burst, US stock valuations became increasingly attractive relative to EM stocks.
As time went on, I noticed a developing trend amongst my subscribers. Firstly, there have been not an insubstantial number of paid subscribers who unsubscribed over the past year — who cited increasingly attractive US valuations as their main reason for unsubscribing. Some of them even left me glowing reviews saying that they would be happy to resubscribe if I ever decided to focus on US stocks. Naturally, I can only assume that these are mostly institutional investors who invest in US markets.
Secondly, it has also been brought to my attention over the past year that there are just far less people who identify as Value Investors in this part of the world as compared to in the USA. While I consider all investing style preferences equal, it remains true that the local TAM here is just significantly smaller as compared to stateside.
Putting these two together means that this newsletter had a Product Market Misfit — since the overlap of investors who 1) invest in SEA stocks + 2) also subscribe to institutional-level Value Investing just isn’t very large. I’ve taken the liberty to demonstrate this phenomenon in the Venn diagram below:
This is especially so when you consider how US stock valuations have become increasingly attractive as compared to SEA stocks over the past year. After listening to much thoughtful subscriber feedback, I’ve decided that I can provide the most value to the global value investing community by switching the regional focus of this newsletter from SEA stocks to US stocks (including US-listed ADRs).
There are actually substantial benefits to subscribers in aggregate from this newsletter switching to a US stock coverage:
US stock Valuations in many key sectors have dropped significantly — this is especially felt when compared side-by-side to EM stocks, many of which have outperformed over the past year due to experiencing relatively muted inflation.
Certain value investing Strategies are more suited for developed markets, e.g. US markets. For instance, some investors might be comfortable holding a highly concentrated portfolio of high-quality Compounders composed of exclusively US-listed stocks (alá Buffett); whereas some investors have expressed wariness to me about doing the same with EM stocks on corporate governance concerns in the past. Switching to a US stock coverage will allow this newsletter to explore more kinds of value investing strategies to the incremental benefit of all value investors.
WHY WRITE 2x MONTHLY → 1X?
The truth of the matter is that performing two institutional-level deep-dives per month is absolutely brutal. Quite frankly, I probably wouldn’t have gone with 2x monthly reports to begin with if I had to start all over again. Painful experience has taught me that it is completely unrealistic to adequately cover a large-cap stock like Canadian National Railway, Netflix or Bukalapak AND edit a long-form stock report within the span of 2 weeks — this is why I sometimes had to split single-stock reports into several parts in the past. If I were to stick to my current pace of 2x monthly reports, I’d pretty much only be able to sustainably cover small-cap stocks.
In order to maintain the present level of institutional research quality, it is genuinely in my subscribers’ best interest that I sacrifice my current unrealistic pace for higher quality and sustainability. Warren Buffett has previously said that you really only need 1x good stock per year in order to compound capital at 15% CAGR — and even at 1x stock report per month, this newsletter will still be producing at least 12x stock reports per year going forward. In value investing terminology, the margin of safety here remains very high at >90% (i.e. 1/12).
However, I remain fully committed to writing plenty of free stock reports, as I have already been doing in the past. These may not be as detailed as my paid reports, but still represent potentially undervalued businesses nonetheless. Expect there to be much more such stock reports on this newsletter — I may even spontaneously elect to occasionally turn some of these into bonus reports for paid subscribers if they’re good enough!
WHY RAISE THE PRICE BY +300%? The median newsletter price for Financial Substacks is actually $30/month!
When this first came to my attention, I initially found it hard to believe myself — my previous rate of $10/mth was only 1/3 OF THE MARKET RATE! Most Substack newsletters with an institutional finance focus actually tend to charge a median rate of ~$30/month — the list below shows a plethora of examples of what other Substack newsletters in the genre are charging (with links provided):
STOCK-FOCUSED:
MACRO-FOCUSED:
Coincidentally, Michael Fritzell from Asian Century Stocks also recently published a tweet where he listed down the subscription rates of various Finance-related Substack newsletters (some overlap). As you can see below, he too concluded that the median market rate was around $30/month and $330/year:
The aforementioned rates demonstrate how the majority of Substack newsletters with an institutional finance focus tend to charge monthly rates of between $25 - $50 — for a median average rate of $30/month and $330/year. This stands in stark contrast to what Value Investing Substack had been charging — which up to now had only been $10/month or $99/year! I was just as appalled when I realized I’d been charging only 1/3 OF THE MARKET RATE!
Charging 3x less than the current market rate also happens to be quite detrimental to the BRANDING of this newsletter, due to the signaling effect — where humans tend to instinctively associate lower prices with lower quality. This made me recall well-intended feedback that I‘d previously received from some subscribers — that they’d initially thought that my newsletter was targeted at the Mass Market until they subscribed to my full reports, due to what my materially lower rates were communicating relative to market rates. I am highly motivated to address this possible misinterpretation by raising my prices to simply match current market rates.
For an example of the institutional-level research quality that paid subscribers can come to expect from Value Investing Substack, please have a look at my 1,800-word primer on SVB Financial and this industry primer of Class 1 US Railroads:
What To Expect From Value Investing Substack In The Future
Undervalued US Stocks, The Warren Buffett Way!
More Value Investing!
Shorter but equally detailed paid stock reports — mimicking the format of most investment bank sellside reports!
SAVES TIME!
Jam-packed info density! — Same amount of quality detail, but less fluff!
Judicious use of footnotes to make reports shorter, without sacrificing detail.
Check out our latest OCCIDENTAL PETROLEUM (OXY) report to see an example of this in action!
Once again, existing subscribers may request a pro-rated refund by following the instructions in the section above — via one of the methods below:
The Value Investing Substack Portfolio Outperformed The S&P500 By Over +16.6% In 2022! Click the link below to find out more!
