Re-searching the changing role of equity research

Last Sunday I had been to my stockbroker friend’s house to attend his New Year lunch invitation. When I arrived at his house he was busy in collecting some old papers from his chest drawer. I innocently enquired about those papers. He replied that he had some twenty five years old equity research report and proudly showed it to me.
The report has coverage on a Multi National Company quoted in Wall streets’ Dow Index. Once again I asked him who exists today, the researcher or the researched company. He replied that the researcher had gone away from the scene and the researched company exists. We debated for a while about the changing need for equity research, reporting and its style.
The style, depth and variety of instruments, products and participation in stock trading across the globe have undergone a sea of change. Unfortunately the equity research reports are very dry and static. The presentation and content has not changed over the years.
I compared the tone and the language of the equity research report prepared some ten years back on a particular company with similar report prepared currently by a broking firm on the same company nothing new I could notice. Nor I could take out anything extraordinary fresh information from the report given the fact the market environment has undergone sea of change.
I simply recollected what the comedian George Burns at the age of 99 said that “retirement at the age of 65 is ridiculous. When I was 65 I had pimples”.
I know well that recommending a fully predictable and workable plan for your stock investments become virtually impossible. But at the same time I cannot always leave my personal bookkeeping to God!
I am not a professional equity research analyst. But what I feel is currently the reports are not investor friendly. Only the author sometime understands the report and definitely not the reader or the investor. Most of them are shallow in tone. Lack conviction and reflects inexperience in putting across the financial information and interpretations. Mostly the reports are leaned towards buy recommendations and aim to attack the truth with the lies. Sales pitch is more reflective than investment plea benefiting the investors. Unfortunately, not all research is worth buying. The missing link is the X-factor- time. Research reports do not help the investors to at least reduce the anxiety of indecision. Moreover, the disclaimer annexure some time runs more pages than the report itself adding sleepless nights to the investors who happen to lay hands on them.
I don’t expect any research report to be complete in all respects. My compliments to equity researchers who contribute a lot in fill up the blanks in the investment process of an investor.
In a lighter sense my friend use to say that these reports make suggestions like-The safest way to double your money is to fold it over once and put it in your pocket!
My experience says that the road to net success in making profit in stock market is always under construction for investors. Well researched reports always succeed in protecting both the investors and their investments.
My stock investor friends’ may know that the month of January is named after the Roman god Janus. It has two faces; one face looking backward in reflection upon the past. The other face looks forward toward an unknown future. For any stock investor January is a good time to reflect and also to re-envision- Profitable 2012 for my blog readers.

2 replies to “Re-searching the changing role of equity research

  1. Guess technology and adoption of capitalism across the globe has changed the ball game now. It would be great if you can get your hands on that 25 yr old report and put it here.


    1. Sriniselvam
      Thanks for ferrying into my Blog. Others’ reports cannot be put up for public consumption.
      If you want you may try your luck by writing to leading Global Fund Managers.


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