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Recent Articles

Using public information for stock research

Twenty years ago the first place to start research a stock was to get a copy of the S&P “tearsheet” and con­tact the com­pany to get sent a pile of printed mate­ri­als to go over. These days every­one starts online because it’s fast and easy. How­ever for pub­lic infor­ma­tion to be enlight­en­ing one must make a […]

Analyst Character and Mindset

We saw a good post over at the research puz­zle on “unbi­ased indus­tri­ous­ness” and it illus­trates some key facets of doing the job right as a research ana­lyst, no mat­ter where you work, or how you are paid. Although we have always used dif­fer­ent words to describe it the char­ac­ter and mind­set of the ana­lyst is […]

Information and Regulation FD

This is the first of what will be many posts on basic infor­ma­tion gath­er­ing. Gath­er­ing infor­ma­tion is the foun­da­tion of every­thing that a good sell-side ana­lyst does. We’ll cover lots of pieces but with­out con­tin­ual, effec­tive infor­ma­tion gath­er­ing there is no “flow” which is an impor­tant part of being good on the sell-side. The Internet […]

The Return of Research Driven Capital Markets?

With the return of the IPO mar­ket the dis­cus­sion of research and bank­ing has started to come up again. For those who were not around for the last one there were a num­ber of research-oriented invest­ment banks like Ham­brecht & Quist, Robert­son Stephens, Alex Brown and Sound­View Tech­nol­ogy Group that led most of the emerging […]

Options

Stock options are cov­ered as part of the train­ing and qual­i­fi­ca­tion process for equity ana­lysts but most of the time they are ignored or unused which is a shame. Part of the rea­son is that many peo­ple just don’t feel com­fort­able with options even after they are explained clearly. We know really smart peo­ple who […]

What’s all this about “edge?”

The demise of Galleon has stirred up press cov­er­age and much dis­cus­sion over what the hedge fund indus­try often calls “edge.“  The basic idea is to find infor­ma­tion that is not known by any­one else in the stock mar­ket.  Then all one needs to do buy and sell the right stocks and make huge profits […]

It’s not the horse.

It’s still com­mon  to run into pro­fes­sion­als who can’t quite see the value of research.  My con­vic­tion on it is quite deep because it comes from apply­ing it directly to stock mar­ket invest­ments since the late 1980’s.  Yet not a week goes by where we don’t fine very smart, invest­ment savvy peo­ple who find it […]

What is a research report?

We noticed a recent head­line that NASDAQ OMX (NDAQ — $21) has selected Morn­ing Star (MORN — $43) to pro­vide “Equity Research Pro­file Reports” for all their listed stocks.  Today there are more than 3,600 com­pa­nies listed and a large num­ber, let’s say 1,000 have no “research cov­er­age” today. The “pro­file reports” are planned to […]

What happened to research?

It’s a long story. The truth is it started fad­ing while it was still grow­ing in impor­tance.  The first cul­prit was invest­ment bank­ing.  Stock trad­ing com­mis­sions were some­thing like 5c per share while invest­ment bank­ing deals offered $1 or even more per share.  No won­der peo­ple were dis­tracted by the money.  Suc­cess­ful sell-side ana­lysts not […]

They don’t teach it in school.

In 1995 my dream came true.  After a career at IBM, and MBA in finance and a stint as a VP of insti­tu­tional sales at a major Wall Street firm I was handed the keys to the king­dom — to be an equity ana­lyst on the sell side. Strangely enough the sec­tor I was hired […]