For a brief period I have worked as a Equity Research analyst in the sell side for a Brokerage House. Some of my Observations are
- This is relevant in the context of allegations of insider trading by Galleon Hedge fund managed by Raj Rajaratnam.
- Information is the most precious commodity in Dalal Street or Wall street.
- Infact Satyajit Das mentions in his interesting book " Traders , Guns and Money " how Brokers at BSE wonder about maing money without previeliged information.
- In my experience what is most important for the analyst is his contacts with company managers and excutives. Networking abilities were found to be more in demand than analytical abilities.
- Because only incremental information affects the stock prices what is not discounted is valuable to the analyst.
1 comment:
Namastê
Indeed network is a must.
It reminds me a Peter Lynch quote:
"When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm."
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