Sell Side research

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res420

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Sell-side research is 90% financial journalism. Agree/Disagree ??
 
Have you ever worked in SS research? Analysts might occasionally appear on tv or radio to discuss something topical in their sector. They might sometimes write a piece for a finance related magazine too, but that's about it.

If I had to put a percentage on it, I would say typically 0%-1% of the average SS research analyst/associate's time is spent on journalism.
 
well, they don't run money, so.....

there's also some adage about can/do, can't/teach that comes to mind. but, to your point, res420, it has to be lower than 90%, because you have to account for time spent jockeying a time slot for tongue action on management's exit hole.
 
at least sell side researchers arent directly losing anyone money. unfortunately, the same cant be said for overpaid, useless money managers that underperform broad indexes year in and year out.
 
I've seen this many times (money managers under performing broad indexes, fees, etc.) and books have been written that discourage the use of active managers but irregardless of average under performance, what exactly are the other main benefits of getting service from a money manager (is it mainly during unstable markets, etc.)?
 
no benefits to putting your money in an actively managed fund, imo. if you have time and are willing to learn, you can do better. if not, index, with most of your capital in international indices for the forseeable future. active managers on whole underperform in every market, up down sideways, etc. a lot of studies on this.
 
so there's no other advantage to being part of an average actively managed fund? Then how has the industry survived and expanded for so long? I think academic books have been written against actively managed funds for the past two or three decades.
 
theres a sucker born every minute. the financial IQ of the average citizen is low, even though the basics could be learned quite easily. they should probably require some courses in high school or something along those lines. people chose to invest with Madoff and other con artists even when it sounded too good to be true. who knows what people are thinking.
 
threedoorsdown, I tend to agree with you about active management, but doesn't your advice to have "most of your capital in international indices for the forseeable future" amount to just the sort of active management you're criticizing?
 
good point. but even the guy who chooses to go the indexing route has to make some allocation decisions. stocks vs bonds at the very least. professional financial planners (as opposed to money managers) can be helpful with that, but these are pretty basic decisions one can make on his or her own.

i suppose there are degrees of active management. allocating between stocks and bonds and different countries is a pretty low level of activity, imo. and besides, this is an individual doing it on his or her own-- a big difference from paying someone fees to make these basic decisions. sticking with the bread and butter diversified products out there, the SPYs (MDY even better), EEMs, etc. and you will have trouble underperforming.


digressing a bit, but i consider the markets no different than a casino. better odds for the most part, but its calculated risk taking. if you bought at NAS 5000, your odds are like vegas slots. if you bought SPX 666, your odds are much better. The Nikkei 225 has gone nowhere for almost three decades. trading>investing if you have what it takes. and the individual investor has a huge advantage over institutions in this game. jmho
 
i think the distinction 3doors is tying to make is asset mgmt vs. active mgmt. asset mgmt is worth paying a fee for if you don't want to invest your own money, track your portfolio, set your own allocation, find your investment alternatives, pick the best (likely the cheapest), deal with the taxes, pinpoint lifestyle needs and stick to it, get adequate insurance and whatever else comes with asset mgmt. its worth paying 1% for AUM with the services above. paying 1% for some guy to try and beat his benchmark is rarely a good choice.
 
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