Reuters
Sometimes the notes we find are funny. Sometimes analysts appear too deferential to management. Sometimes analysts all seem parodically headed in the same direction.
But the vast majority of Wall Street research is an inoffensive effort by analysts who - not unlike journalists - cover a specific slice of an industry and aim to serve clients by offering their best-informed views on what they're seeing and why it matters.
This work, however, often draws the ire of critics and these critics take many forms.
Some of them could be media members who can't believe every analyst is saying the same thing. Critics could also be portfolio managers who can't believe the analyst community got a stock so wrong. But for investors and clients of investment banks, analysts are not meant to replace but supplement your own work.
In a great Twitter rant on Friday, pseudonymous analyst @NoonSixCap broke down a number of misconceptions that folks all across the industry have about what the job of an analyst really is.
And the major takeaway is that you - not any sell-side analyst - are responsible for returns. Full stop.
Noon Six said the whole rant is kind of a yawn, but we'd disagree.
Because while a lot of this commentary might fall into the category of "stuff we all know is true," nothing gets quickly and conveniently forgotten quite like a known truth.
Do you suffer from Analyst Derangement Syndrome (ADS)? Know the signs - your P&L could depend on it:
- Noon Six Capital (@NoonSixCap) August 5, 2016Do you think there's a "rigged game" where Analysts and IR teams collude to "keep estimates low" so co's can "beat" them?
- Noon Six Capital (@NoonSixCap) August 5, 2016…While also railing against the sell-side's ever-too-rosy projections?
- Noon Six Capital (@NoonSixCap) August 5, 2016Are you unaware that sometimes co's do in fact have "great qtrs" - & that mgmt (people-much like Analysts) occasionally deserve a congrats?
- Noon Six Capital (@NoonSixCap) August 5, 2016Do you think Analysts are willing to cross any line "for the good of the firm," but are unaware of how they're comp'ed (quantity/style)?
- Noon Six Capital (@NoonSixCap) August 5, 2016Do you mock the sell-side's inability to "pick" stocks, while temporarily forgetting the fact that most "pros" underperform v. indices too?
- Noon Six Capital (@NoonSixCap) August 5, 2016Is acknowledging the true role of the sell-side - provide detailed historical info/context and mgmt access to clients - unsettling for you?
- Noon Six Capital (@NoonSixCap) August 5, 2016Do you think Analysts at firms for which you are not a paying client owe you and/or the public a g***amn thing?
- Noon Six Capital (@NoonSixCap) August 5, 2016And finally, do you blame "the Street" for your poor performance?
- Noon Six Capital (@NoonSixCap) August 5, 2016