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Strongly disagree. Sell-side research and models, which are what's discussed in this article, are strictly monitored for material non-public information (MNPI).

by _sword 7y ago

Strongly disagree. Sell-side research and models, which are what's discussed in this article, are strictly monitored for material non-public information (MNPI). Further, most institutional investors now are closely monitoring the information flow in and out of their firm and what they can discuss when in meetings with corporate clients so that they don't have the SEC breathing down their necks for potential inside trading issues. The narrative you're describing pretty much existed 10+ years ago, but post financial crisis it's a different game (which likely has hit hedge fund returns imo).

corporateslave5 7y ago
Finance is about personal relationships and private information. That’s how investing has always worked. It’s cynical and the public likes to believe in the math geniuses on Wall Street, who don’t get me wrong, they do make money, but the real money is made behind closed doors
- _sword 7y ago
  I was one of those people on Wall Street and it doesn't work like that to the extent you're thinking anymore. In my experience, relationships with consultants at big name firms could offer better channel checks, but pretty much no one is straight up hearing from a CEO that they had a blow out quarter with X, Y, Z client wins before that info goes public. Too many people have too much to lose.
  - codingslave 7y ago
    You see the same in in M&A, often times the bank that wins the deal is the one where the managing director knows the people taking the company public. Its about relationships. Same thing with private equity. The equity markets are also miniscule compared to the bond market, where this kind of thing is even more widespread.
    - _sword 7y ago
      The banking side is a different topic than the post at hand here. No doubt in my mind that banking functions as a relationship driven business - you're right there.
      - codingslave 7y ago
        Its mostly the same type of person. Funds hire investment bankers as their analysts. The industry is really small

by _sword 7y ago

corporateslave5 7y ago

Finance is about personal relationships and private information. That’s how investing has always worked. It’s cynical and the public likes to believe in the math geniuses on Wall Street, who don’t get me wrong, they do make money, but the real money is made behind closed doors

_sword 7y ago
I was one of those people on Wall Street and it doesn't work like that to the extent you're thinking anymore. In my experience, relationships with consultants at big name firms could offer better channel checks, but pretty much no one is straight up hearing from a CEO that they had a blow out quarter with X, Y, Z client wins before that info goes public. Too many people have too much to lose.
- codingslave 7y ago
  You see the same in in M&A, often times the bank that wins the deal is the one where the managing director knows the people taking the company public. Its about relationships. Same thing with private equity. The equity markets are also miniscule compared to the bond market, where this kind of thing is even more widespread.
  - _sword 7y ago
    The banking side is a different topic than the post at hand here. No doubt in my mind that banking functions as a relationship driven business - you're right there.
    - codingslave 7y ago
      Its mostly the same type of person. Funds hire investment bankers as their analysts. The industry is really small