Channel Checks

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res420

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How do you guys in Research ( sell & buy ) do your channel checks. Do you use personal contacts , use services such as Gerson-Lehrman ? I believe that this is one of the most difficult part of the Equity Research job since it’s really hard to reach a wide enough sample of people to draw any meaningful conclusions.
Were you ( or anyone you know ) able to make a call based on your checks ? it seems everyone reads the same magazine and articles and everyone has access to the same info ?
What about the hedge funds ? Anyone knows how they get a leg up on the rest of the market when they buy a stock ?
 
It IS hard to do channel checks in sell-side research, because most firms don’t have the budget to be spending on things like GLG consultants. Without paying for “expert” opinions, it can be hard to do real credible research. That was one of the biggest challenges we faced in equity research. Sure, my senior analyst and I went to industry conferences and probably had a fair number of people wanting to talk to us since we were at a BB, but still, we can’t exactly go toe to toe in the knowledge department with guys that were actually M.D.’s and Ph.D.’s in their field unless we have some type of consultant like GLG telling us the “inside scoop.”
in comparison, we use the service very frequently in private equity, though with the way the industry is right now, sometimes I wonder how we still have the budget for them. But whatever, they make my life a whole lot easier and there would definitely be an information asymmetry/advantage if you had an exclusive connection with a good consultant there, given that most of the people in PE, IB, and ER really are “dumb finance guys” and any person serious about buying a company, like a PE investor, probably wants to draw upon outside knowledge sources like GLG as part of their diligence process. The only problem is, while one PE firm might have the “edge” over an average individual because of a good GLG source, rest assured that the same GLG source has probably been contacted by several other PE firms in the same market if they happen to be looking at the same deals…
 
It IS hard to do good channel checks in sell-side research, because most firms don’t have the budget to be spending on things like GLG consultants. Without paying for “expert” opinions, it can be hard to do real credible research. That was one of the biggest challenges we faced in equity research. Sure, my senior analyst and I went to industry conferences and probably had a fair number of people wanting to talk to us since we were at a BB, but still, we can’t exactly go toe to toe in the knowledge department with guys that were actually M.D.’s and Ph.D.’s in their field unless we have some type of consultant like GLG telling us the “inside scoop.”
in comparison, we use the service very frequently in private equity, though with the way the industry is right now, sometimes I wonder how we still have the budget for them. But whatever, they make my life a whole lot easier and there would definitely be an information asymmetry/advantage if you had an exclusive connection with a good consultant there, given that most of the people in PE, IB, and ER really are “dumb finance guys” and any person serious about buying a company, like a PE investor, probably wants to draw upon outside knowledge sources like GLG as part of their diligence process. The only problem is, while one PE firm might have the “edge” over an average individual because of a good GLG source, rest assured that the same GLG source has probably been contacted by several other PE firms in the same market if they happen to be looking at the same deals…
 
It IS hard to do good channel checks in sell-side research, because most firms don’t have the budget to be spending on things like GLG consultants. Without paying for “expert” opinions, it can be hard to do real credible research. That was one of the biggest challenges we faced in equity research. Sure, my senior analyst and I went to industry conferences and probably had a fair number of people wanting to talk to us since we were at a BB, but still, we can’t exactly go toe to toe in the knowledge department with guys that were actually M.D.’s and Ph.D.’s in their field unless we have some type of consultant like GLG telling us the “inside scoop.”
in comparison, we use the service very frequently in private equity, though with the way the industry is right now, sometimes I wonder how we still have the budget for them. But whatever, they make my life a whole lot easier and there would definitely be an information asymmetry/advantage if you had an exclusive connection with a good consultant there, given that most of the people in PE, IB, and ER really are “dumb finance guys” and any person serious about buying a company, like a PE investor, probably wants to draw upon outside knowledge sources like GLG as part of their diligence process. The only problem is, while one PE firm might have the “edge” over an average individual because of a good GLG source, rest assured that the same GLG source has probably been contacted by several other PE firms in the same market if they happen to be looking at the same deals…
 
iheartiheartmath Wrote:
——————————————————-
> It IS hard to do good channel checks in sell-side
> research, because most firms don’t have the budget
> to be spending on things like GLG consultants.
> Without paying for “expert” opinions, it can be
> hard to do real credible research. That was one of
> the biggest challenges we faced in equity
> research. Sure, my senior analyst and I went to
> industry conferences and probably had a fair
> number of people wanting to talk to us since we
> were at a BB, but still, we can’t exactly go toe
> to toe in the knowledge department with guys that
> were actually M.D.’s and Ph.D.’s in their field
> unless we have some type of consultant like GLG
> telling us the “inside scoop.”
>
> in comparison, we use the service very frequently
> in private equity, though with the way the
> industry is right now, sometimes I wonder how we
> still have the budget for them. But whatever, they
> make my life a whole lot easier and there would
> definitely be an information asymmetry/advantage
> if you had an exclusive connection with a good
> consultant there, given that most of the people in
> PE, IB, and ER really are “dumb finance guys” and
> any person serious about buying a company, like a
> PE investor, probably wants to draw upon outside
> knowledge sources like GLG as part of their
> diligence process. The only problem is, while one
> PE firm might have the “edge” over an average
> individual because of a good GLG source, rest
> assured that the same GLG source has probably been
> contacted by several other PE firms in the same
> market if they happen to be looking at the same
> deals…
ah-HA! Numi double posted, and then you posted the same thing a third time! Is the funny part where you posted the same thing the third time? I think it is, but I’m not sure.
 
numi double posting, no way, stop slacking where’s your attention to detail!
 
kblade Wrote:
——————————————————-
> numi double posting, no way, stop slacking where’s
> your attention to detail!
I’m going to guess it wasn’t his fault seeing as how the second post occurred ~3hrs later….then again maybe it’s an elaborate ploy to mess with our heads.
Server needs servicing?
 
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