Buy side clients

Can someone clarify to me this:

_One source of pressure on sell-side analysts is buy-side clients. Institutional clients are traditionally the primary users of sell-side research, either directly or with soft dollar brokerage. Portfolio managers may have significant positions in the security of a company under review. A rating downgrade may adversely affect the portfolio’s performance, particularly in the short term, because the sensitivity of stock prices to ratings changes has increased in recent years. A downgrade may also affect the manager’s compensation, which is usually tied to portfolio performance. Moreover, portfolio performance is subject to media and public scrutiny, which may affect the manager’s professional reputation. Consequently, some portfolio managers implicitly or explicitly support sell-side ratings inflation._Portfolio managers have a responsibility to respect and foster the intellectual honesty of sell-side research. Therefore, it is improper for portfolio managers to threaten or engage in retaliatory practices, such as reporting sell-side analysts to the covered company in order to instigate negative corporate reactions. Although most portfolio managers do not engage in such practices, the perception by the research analyst that a reprisal is possible may cause concern and make it difficult for the analyst to maintain independence and objectivity.

Bob is the friendly, neighborhood sell-side analyst. He thinks that investing in XYZ Company stock is lunacy, and intends to issue a report with a sell recommendation. That’s _ SELL _: all caps, bold, italics, underlined. With exclamation points.

Ivan manages an institutional investment portfolio that holds a lot of XYZ stock. Ivan gets a bonus when his portfolio does well, and a bigger bonus when it does really well. He doesn’t get a bonus when it does poorly, and a decline in the price of XYZ stock will lead to poor performance.

This vexes Ivan. Sorely.

Ivan phones Bob and tells Bob that the risk of XYZ stock declining in price vexes him (Ivan). He (Ivan) hints that it could also vex his (Ivan’s) cousin, Boris, the Soviet gulag ex-con. He (Boris) takes being vexed very personally. Very personally, indeed.

Bob reconsiders his recommendation.

Boris likes to make jokes about things that open very large doors

Does this really happen ?

Hardly ever.

I didn’t realize that you’d met Boris.

He makes, shall we say, a lasting impression.