The SellSide, Exposed

Everyone has strong opinions when it comes to the usefulness of SellSide analysts.

They take a lot of grief, but many of them are extremely capable analysts. Indeed, it is not a stretch to think that they could product a financial blog that would be widely read, and superior to anything that exists currently.  They have the skillset, and often build models and write far better than their BuySide counterparts.

And they are useful. While they get a lot of grief, they can often tell you something you don’t know. They are full of market intelligence, much of which is only shared face to face, and make stock specific calls that are useful, even if you are only fading their upgrades. Personally, I love selling into those moves.

But you have to know the “code”, and unless you paid your dues on the Street, chances are you don’t know how to play the game. But a book, written by a longtime SellSide analyst, might help some investors with the inside baseball played in the big city:

McClellan says that when he retired, he began to realize how naive individual investors “take Wall Street literally.” When analysts rate a stock as a buy and expect it to rise 20% in the next six months, many individual investors actually believe them.

The book is designed to “expose the puzzling, deceptive, conflicted behavior of Wall Street that so disadvantages individual investors,” he writes. It’s not that Wall Street intentionally tries to cheat and deceive individual investors, he says. Rather, investors are at a disadvantage because so many other interests—those of companies, institutional investors, and the brokerage houses themselves—come before their own. Business Week

I plan on checking the book out, but have to question the author’s sanity. Who spends 32 years as a SellSide analyst?

Stephen McClellan is clearly deranged.

Is Wall Street ‘Full of Bull’?
Business Week

Full Of Bull: Do What Wall Street Does, Not What It Says, To Make Money in the Market
Amazon.com
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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