Ex-banker’s novels help simplify investor jargon

by Shinya Ajima

Kyodo News

On a recent trip to the bookshop, two books with rather flashy jackets catch your eye. They appear to be out of place, perhaps abandoned in the best-seller area by a fickle customer.

You pick them up almost without thinking, perhaps attracted by the colorful jackets or the cute cartoons. Upon opening them, however, you realize that their contents are the last thing you expected — one is about stocks and the other about foreign investment banks and mergers and acquisitions.

“People need to learn difficult things easily,” said Takaaki Hoda, coauthor of the investment book “OL Ryoko no Kabushiki Diary” (“Office Lady Ryoko’s Diary of Stock Investment”).

The 31-year-old former investment banker, who also wrote “Toshiginko Seishun Hakusho” (“My Salad Days as an Investment Banker”), believes people pick up his novels thinking they are comics.

“I don’t want to be seen as an expert who can only explain difficult things with difficult words,” he said. “That’s why I’ve chosen this style to help resolve the growing information gap among people.

“People hope to have fun, especially when they have to do something complex or difficult. My books are basically love stories that people can enjoy and get pleasure from without spending a great deal of time in reading them,” Hoda said.

“Ryoko’s Diary” is about a receptionist at a trading house who learns about stocks at matchmaking parties with men from various industries.

“We wanted to show readers many different views of the stock market, which differs according to the viewpoint of the industry you adopt,” Hoda said.

Ryoko gathers her investment knowledge at her many “gokon,” or group dating parties.

One day, she goes to a dinner where one of her friends introduces her to an analyst, who turns out to be her ex-boyfriend. They broke up years ago because he was always busy slaving away at his brokerage.

“Readers enjoy Ryoko’s story and read through the book because they want to know what happens to the couple in the end, and at the same time they can learn what stock trading is and how it is carried out,” Hoda said.

This is not a book about how to make money, and Ryoko actually suffers some losses in her trading, said Ryosuke Fujii, the other coauthor and a hedge fund manager. “It is also a warning to individual investors who tend to think they can make easy money in day-to-day trading.”

The number of individual investors spiked in 2005, reflecting the spread of online trading and booming markets for startups, including Internet firm Livedoor Co.

But startup markets have been sluggish since many individual investors withdrew in January after the raids on Livedoor, which has been accused of accounting fraud and stock price manipulation.

Hoda said Japan should not forget the good things that were associated with the “Livedoor shock.”

Livedoor founder Takafumi Horie, who is now standing trial, succeeded in familiarizing the general public with a lot of technical things — particularly mergers and acquisitions — that would otherwise have stayed unknown to the majority of Japanese, Hoda said. Horie found M&As to be an invaluable tool in Livedoor’s rapid expansion drive.

Horie “made people interested in what was going on and prompted them to go to shops for books to learn about stock trading and M&As,” Hoda said. “But unfortunately, at that time there were no books that could sufficiently help such people understand economics and finance.”

Hoda joined Lehman Brothers in 1998 at age 23 after graduating from Waseda University.

“I was interested in M&As but knew little,” he said. “Then I bought books and also attended lectures by experts. But all my efforts failed because I couldn’t understand the jargon.”

His book on investment banking is about a new graduate, Miyabi, who speaks English but doesn’t know what the foreign investment bank she works at does.

Miyabi is put on a team that proposes its client, a Japanese cosmetics firm, acquire its U.S. rival. She takes a senior associate on the team as her mentor, and studies the ins and outs of the investment banking business, including fundraising and M&A-related advisory services.

She also falls in love with the associate.

“Half of her character is based on my experience,” Hoda said, smiling.

Hoda moved to UBS when he was 27. He then quit the Swiss investment bank at 29 to launch a company that runs a social networking Web site in Japan and later sold it.

After working for a venture capital firm, he set up an “individual” economic research institute this year. Now Hoda advises venture firms on accumulating funds, while doing a variety of side jobs. He is also an author, lecturer and TV commentator.

He said there is an “information technology gap” in Japanese society with a growing divide between the information haves and have nots.

“For example, there is a company that has information people want to buy,” he said. “The problem now occurring in Japan is that the company only gives us the information using technical terms that customers cannot really understand.

“My job is to let people digest difficult matters enjoyably, and I’ll keep on trying to address this information gap.”