Jerry Diao, a statistics graduate from UC Berkeley with an MBA from NYU, once built his career analyzing Silicon Valley’s tech stocks. Now, he’s better known as “Richard Toad,” the creator of a YouTube channel where he dishes out financial advice while wearing a Shrek mask
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What pushed him toward blogging? A perfect storm of industry upheaval, artificial intelligence, and automated tools for regulatory tracking made traditional analyst roles less secure.
Jerry’s journey mirrors a broader trend. Over the last ten years, the number of analysts employed by the world’s leading banks has fallen by 30%, shrinking from 4,600 to just 3,000, according to Vali Analytics.
At the same time, research budgets have been halved since 2018 (Substantive Research). With fewer resources, the remaining analysts are stretched thin, covering two to three times more companies than before, which has inevitably led to a decline in the quality of analysis.
This thinning of the ranks is taking a toll on the stock market. Around 1,500 companies in the Russell 2000 index now have fewer than 10 analyst recommendations, while big players in the S&P 500 enjoy the spotlight—97% of them receive at least 10 analyst reviews.
The consequences are significant: inadequate coverage distorts stock valuations, raises the cost of capital, and diminishes liquidity. Studies consistently show that companies with little analyst attention tend to be undervalued by the market.
To fill this gap, many former analysts have gone independent, launching paid blogs and Substack newsletters. Ironically, some of their subscribers are the very firms they used to work for, now desperate for insights. Wealth managers, like those at Northwestern Mutual, are among the subscribers. On Substack, some writers rake in $260,000 annually. One ex-analyst, with a résumé that includes Lehman Brothers and BlackRock, charges $999 a year for exclusive content access
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Yet, even with this pivot to blogging, income levels often fall short of what these analysts once earned. Moreover, the investment advice offered by even the most followed bloggers often underperforms standard market indices.
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