Does the difference lie in the sense that sellside analysts perform research on particular stocks and give recommendations of ‘buy’ or ‘sell’, while buyside analysts work for pension or mutual funds? And to whom each of them give recommendations, respectively? Anyone can clear these concepts for me? thanks,
OK, I’m in a good mood, so I’ll just point out that this is a question that most people on this board expect board participants to know. And you may find yourself subject to a little ridicule for asking it… but it’s the price of entry. So, buy side and sell side. The buy side people sit on a bunch of money and try to figure out how to invest it to make it grow. Usually they are buying securities, though some funds will sell securities as well in order to hedge their risks appropriately, and a very few might try to make money by selling only (short-selling funds try to profit from companies whose stock price is falling). The sell side people actually execute most of the transactions that the buy side wants to do, usually by being a prime broker. They make money on commissions from these transactions, so they provide information hoping that customers will use their brokerage services to buy and sell things. There’s also a nice quote about buy side and sell side and the telephone. One of my favorites here at AF…
ummm, and another question, how do buy side people know whether the info provided by sell side people is valuable or not?
rong19 Wrote: ------------------------------------------------------- > ummm, and another question, how do buy side > people know whether the info provided by sell side > people is valuable or not? That comes with experience. A lot of times, I use sell-side research to look at the investment thesis and the long term trends that the SS analyst outlines. Then I ignore all valuation, numbers, multiples cause chances are they’ll be “optimistically adjusted.”
try google… http://www.google.com/search?hl=en&q=what+is+buyside%3F here’s first hit. http://www.investopedia.com/ask/answers/04/040204.asp
rong19 Wrote: ------------------------------------------------------- > ummm, and another question, how do buy side > people know whether the info provided by sell side > people is valuable or not? It’s really simple. It’s not valuable.
JoeyDVivre Wrote: ------------------------------------------------------- > rong19 Wrote: > -------------------------------------------------- > ----- > > ummm, and another question, how do buy side > > people know whether the info provided by sell > side > > people is valuable or not? > > It’s really simple. It’s not valuable. UH…Says you. Maybe typical BB & MM research isn’t valuable but I can tell you the research I write and provide has value. We utilize forensic accounting and competition analysis to provide HFs with short-reccomendations and we have a pretty good track record for consistently outperforming the S&P 500 on a long or short basis. Sell-side researchs’ value is not typically (I think we are an exception) in stock picking it is in helping buy-side analysts better understand the industries and companies that they cover. The value to most buy-side analysts comes from a sell-side analyst who can really take the time to help them understand business trends and developments that could impact the value of the various companies in that space. I would pay VERY little attention to their buy and sell reccomendations as well as their price targets.
RAwannabeCFA Wrote: ------------------------------------------------------- > We utilize forensic accounting I have a subscription to JFA and find a lot of it quite interesting…RA, do you have any good recommendations for resources (books or otherwise) for additional information on forensic accounting? Tia
RAwCFA, I’m on the path for the CPA. When you say skills in forensic accounting, you mean the regular CPA stuff, right? Not the CFE stuff. Are you a CPA or do you have specialist forensic accountants at your shops?
Seems like there has to be easier ways to make a buck than forensic accounting but I guess whatever works. I agree… I love reading sellside research just to help me learn about a company. I wouldn’t make a decision on 1 report alone, tho’
So you don’t do it?
sternwolf Wrote: ------------------------------------------------------- > RAwCFA, I’m on the path for the CPA. When you say > skills in forensic accounting, you mean the > regular CPA stuff, right? Not the CFE stuff. > > Are you a CPA or do you have specialist forensic > accountants at your shops? We have people who have the CFE and the CPA who used to work in different capacities elsewhere. Everyone at my firm has strong accoutning skills; however, we have 2 people who really help flesh out our accounting stories and both of them are CPAs and spent time preparing financial statements for publicly traded companies.
Thanks a lot. Just curious, in your research shop the CPA and CPE are most common? Any CMA/CIAs? (or any other educational program for acc. I don’t know about…)