Feb 28 2009

Black Swans and Petrostates: Gregor.us Monthly

February 28, 2009

My February newsletter, Black Swans and Petrostates, has now been published. As the financial crisis ravages the global banking system, my research shows that the impact on Petrostates of last year’s oil price volatility and the subsequent price lows is yet to be revealed. Moreover, I come to some surprising conclusions which suggest underdeveloped and dysfunctional petrostates will likely weather this crisis better than efficient and stable oil producing nations.

My newsletter carries a subscription fee, and while January’s letter is still free, February’s is behind the paywall as I now have subscribers. I recently had a chance to converse with a fellow blogger and writer about the newsletter business, and one conclusion I’ve come to is that writing a newsletter can bring out your best analysis, and your best writing. Producing a worthwhile document for paying subscribers forces one to push past previous limits, and break through to surprising conclusions. I recall reading a story about Peter Thiel’s colleague Kevin Harrington at Clarium Capital, who likes to grind out 20 and 30 page research reports on various topics and writes them in a multi-day blitzkrieg. That’s exactly the right thing to do.

If you invest or manage money, and especially if you blog and write articles as I do, I would say you must write a newsletter. Doing so is the only way to discharge the built-up thoughts that gather over time, and discover how they interlock to form patterns. This is especially true if you trawl through lots of data each month. Only the longer format of the newsletter will get that material into proper form. Short blog posts and articles for printed or online media are their own separate format. They are really just on-ramps or set-ups for your bigger ideas. The short format is for what you already know.

That’s why you must write a newsletter. Only by going through a longer, more grueling writing process can you find out what you knew, but had not yet discovered.

-Gregor

Further Reading:

Warren Buffet Letter to Shareholoders 28 FEB 2009

Jeremy Grantham Quarterly Letter January 2009 (free, but registration required)

• Comments
Author: Gregor Macdonald   Posted in: forecast   Tagged:  
  • E.M. Forster: "How do I know what I think until I see what I say." Your last sentence seems to convey the same sentiment.

    I have a blog post that I'm working on that proclaims the death of the newsletter. My basic theory is that as more voices emerge, for every paying newsletter writer, there will be 10 up-and-coming analysts giving it away for free to make their marks, devaluing (in the long run) the paid analysts. This cycle will repeat, and names will continually turn over. The social filter will replace the editorial filter; there will still be value in finding the new and relevant voice instead of relying on the previously relevant established voice.

    The good news is that the right voice at the right time, properly amplified, can capture value for the content creator, but only for a limited time before circumstances and competition displace it. The numbers are against any single content creator having a long run.

    What may happen then, if you can't amplify that value into other venues (e.g., books, paid media appearances), is that your last observation in the post also becomes the primary value to you, the author--that the clarity of thought of working in the open results in the production of personal clarity of action, and you end up profiting far more from the direct use of your better (and more honest) thinking than from selling it.
  • gregor.us
    Your words are exceptionally wise. And well written! I agree with all you've said.

    Best, G
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