Well I was speaking of research overall…for both buyside and sellside. It’s not really “research” It is almost offensive to use “research” in equity research because this makes it sound very scientific, professional, complicated, robust, and revolutionary…Research new drugs to fight cancer, heart disease, diabetes, etc. Research changes in global ocean temperatures and its current flows and how this affect our atmospheric pressures…Research the fifth generation fighter jet for absolute air superiority. These are research…equity research?? pff that’s cute…It’s so scientific and robust that 90% of active managers fail to beat the market?
Don’t take my word for it…Your fund really beat the benchmark? how about the market? on a consistent basis?
Seems like you are a little upset about this. You are making a lot of assumptions and semantic distinctions that would be too burdensome for me to reply on at my phone. I think we agree, but you are having a very visceral response to the fact there may actually be that 10% in the market…
yes, there are that 10% in the market. Because of that 10%, the 90% of us including myself make a living in this industry labeled as market “expert” or professional.
infinitybenzo’s view represents the skeptic’s take on the industry which may not be as appreciated by some people, but i also applaud the intellectual honesty. as someone that used to sit in the sell-side role and has seen all kinds of bad (or at least lazy) practices both there and also now on the buy-side, his posts strike a chord because there are some very valid elements to them. bottom line is, i think there is underperformance in the markets because both sell-siders and buy-siders try to take “shortcuts” which actually never ceases to amaze me because you can make so much money in this business by doing the real work. but, why bother if you can spend ~70% less effort and still participate in ~70% of the risk-adjusted upside anyway, and your downside risk of getting a call wrong is getting laid off and having to go find another job? it’s not like you have to pay back millions of dollars to the bank or your LP’s for making a lousy call…
I agree. I work in IR/Strategy for a S&P 500 firm in the TMT space. Out of the 25+ banks following us, I would say only 3 actually understand our business well and put time and effort in creating valuable reports… and guess what? You probably never heard of 2 out of the 3!! Independent ER shops do a much better job and deeper analysis than most BB ER in my sector… It really came as a surprise as I thought maybe one day I’ll try to jump ship to SS ER but most of them do not even factor in rising rates this year that’s just sad…