April 10, 2012

Legs, spreads, and maturities

Discussing seiyuu as financial instruments was some stupid fun between some friends on twitter, but after reading this from Akirascuro I ended up thinking too hard about it and my reply morphed into this post.

What kind of considerations would be needed to set up a seiyuu backed security?

Seiyuu careers unfortunately have few similarities with trading vanilla stocks or bonds. You don't really own seiyuu as equity, nor do you enter into the fandom with a large purchase you intend to cash out at a later time. Rather seiyuu career trajectory is much like a series of cashflows without a principal payment at the end. If she reaches maturity date (retire) it's not like you get your money back. Similarly if her career tanks you will not be first in line during the liquidation to receive payout (though this has happened in a certain sense for those in other idol fields).

Instead you pay for her slowly over the years, and you enjoy a seiyuu's work season after season. You could think of them like a dividend paying stock, self issued, but purchased by their agencies who sink the initial cost in training and bringing them up. As they establish their fame in the industry, they may pay out increasing dividend. Fans aren't the agencies so they'll never be able to see the payment, but through the magic of derivatives they CAN still take a position on that dividend. To take account of the complexities of seiyuu career modeling, some sort of security similar to a dividend swap or TR swap on the OTC market would be my choice.

How to design it? The pay leg would probably be some floating rate linked to an index on Seiyuu Income per Season plus or minus some spread. This could be adjusted based on the seiyuu's drawing power, as well as some risk adjustment for the likely direction of her future. Naturally, a seiyuu with lots of fans and very few antis would allow anti-side to demand a huge premium over the index rate. Conversely, seiyuu who are widely expected to fail or have a scandal that kills her career will have no shortage of counterparties willing to discount that rate.

On the other side the receive leg can be some quarterly payment linked to the money she makes per season. This can be derived from episodes acted, media appearances, Oricon sales charts, and other factors in income. Since it's all hypothetical anyway you could even link to some intangible like personal enjoyment out of the roles. Or something dumb like skirt length.

As for maturity, it's hard to say because with individual seiyuu, the cashflows could end at any time and career length varies wildly. Sure you can link the underlying asset to some basket of seiyuu from an agency, or large group with varying ages and an annual rebalance policy, but that takes the fun out of it. After all why be a seiyuu fan if you can't play favorites? We could deal with the uncertainty via short maturity and roll or set it up like a constant maturity swap, but for the TRUE FAN (tm) who's willing to bet some serious money they can do long maturity with a call provision to exit the position. It could be based on time periods or base it around some defined events like career-derailing scandal, tragic illness, a Hirano Aya-type lateral move that changes classification of the underlying security, a systemic Arts Vision style incident, or other unforseen risks. But truly hardcore fans won't even want a call provision so they can lock in their opinions and prove their loyalty.

Designed like this, there is still big money to be made. Assuming you're locked in with a far off maturity date, there are plenty of good trades you could have made.

Loyal fan trade:

For a period of time after K-ON, Toyosaki Aki was overvalued. However, when the boyfriend scandal hit, the market overreacted and spreads went the other way. The loyal fan said "fuck the haters, this scandal is stupid" and bought into an Aki-swap with a massive discount. Now her career is better than ever.

When Nazuka Kaori announced her marriage, the cautious investors remembered what happened to Kaida Yuko and tried to net out their position. More loyal fans who remain unfazed and considered the type of actress she was snapped her up on the cheap. Though there was indeed a brief hiatus, Kaori came back and went on to do several more beloved roles.

Eyes for the rookie trade:

For those with a bit more appetite for risk and bragging rights to say "I liked her before she was cool", you can always take a position on a promising newcomer. People who did this in 2001 for Mizuki Nana hit the jackpot. People who did this for Sakai Kanako in 2006 (including myself) sadly got wiped out. Harukas investors probably broke even since her career mostly matched expectaions. Personally, I would go long on Uesaka Sumire right now for the nice obscurity discount.

Of course there will also be challenges. For example, seiyuu merchandise sales are illiquid enough that an investor with deep pockets could potentially manipulate the underlying asset via large CD/BD purchases that lead to the seiyuu getting a big push from the agency. Another point is that these are obviously uncollateralized, so "seiyuu-backed" is not even remotely true: Ain't nobody gonna gift-wrap Kobayashi Yuu and deliver her to my doorstep (except maybe in my dreams). And we are well familiar with the risks of undercollateralization. But I'm already overthinking this thing so I'll stop here.

I'd love to hear other ideas for instruments and strategies.

Posted by Paranda at April 10, 2012 6:37 PM

Comments

Great idea. You should start an i-bank to package, value, and underwrite these seiyuu backed securities (SBS).

Posted by: HermitLife at April 10, 2012 8:33 PM


LOL thinking about it more, the valuation seems like it would be insanely hard to do for so many individual seiyuu. Maybe exchange traded swap instead of OTC. Better to just sit back and publish the index, play clearing house, and let the market do the the brain damaging part.

Posted by: paranda at April 10, 2012 9:58 PM


Best Seiyuu Post Ever Everywhere Forever

Posted by: omo at April 10, 2012 11:00 PM


I'm against indexing. Most people probably wouldn't be interested in buying pieces of seiyuus they don't care about.

I'd be in the market for writing credit default swaps in the case of seiyuu death//illness though.

Posted by: HermitLife at April 11, 2012 11:18 PM


Prob can move quite a few CDS for those fans who had a temporary love affair but later regretted not taking on a call feature. Like people unwinding on KitaEri after Nisemonogatari episode 8 wears off :P Though irl market for CDS is pretty much dead I wonder if seiyuu ota would trust them. I know it would be crazy hard to value. Wonder what event would be a 2008 equivalent in the seiyuu world?

Now re: index. The fun in seiyuu speculation is definitely in picking the ones you like but even then you'd probably still want the index for a few reasons.

Benchmark rate. To really get some adoption there's gonna be need for some standarization - think of it like the Seiyuu Inter Agency Offer Rate :P (there has got to be a better acronym for this). If you went long on say Asumin you'd get her individual cashflows, and counterparty gets paid that index rate plus spread. The standard also helps you measure your relative performance and helps give perspective.

And of course, hedging! As the notional in your seiyuu swaps portfolio gets bigger, you're also essentially also making a sector bet on the seiyuu industry so you've gotta know what the market is like. Now, I really love Asumin recently so I'd wanna bet big on her personally, but she's getting popular with otaku works instead of general stuff and maybe I'm afraid Ishihara keeps getting elected to fuck up my shit. That's not her fault but she would still suffer for it. Good index would have probably a sector suited for this kind of thing, so if I'm linking my cost to that, I'm naturally protected.

Individual series index could be good too for really long running cash cow series. One Piece looks like it could go on for another decade so you'd think Tanaka Mayumi is safe but who knows, tomorrow Oda hits the pipe a little too hard and suddenly no more One Piece. You could have uses for exposure to that on either direction.

Could get creative and build a sector index...like "glamorous seiyuu" that references vanity mags like HM3, Voicha, etc and treat each month's new issue like a rebalance. Or eroge sector. And write ETFs for these. Damn...must resist urge to write huge post on seiyuu indexing

Posted by: paranda at April 12, 2012 2:56 AM


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