Thursday, November 04, 2004

Follow-up on comments re: the future of sell-side research

This post from yesterday has yielded some much-appreciated comments from a handful of regular readers, found at the end of this post on an unattributable basis. These are all good points, and frankly I don't have any easy answers. One thing I have learned is that these issues seem to be on more minds than I had expected, and one of the sites I have been introduced to in this process carries yet another stinging appraisal. Anyway, back to the comments. I agree that IM is a potent tool, but I guess I was trying to draw a distinction between this sort of immediacy (which I envisaged would be an important part), and something else that is easily archivable, collaborative, and modifiable by all users. As for the strategy/performance implications highlighted by the first reader, I have to hold my hands up and say that this is a dilemma for which I have no easy answer - though I will continue to ponder it. But once I solve it, I won't share the answer! (;-]) The other piece of feedback I had was from the originator of this idea (though I'm not sure that what I suggested is exactly the same as what he is thinking), who has suggested that I identify him and let interested parties contact him directly. His name is Damian Roskill, and his email is Here are the comments, with no doubt more to follow:

1. Buy side guys currently exchange info on IM all day 2. This has made generating good ideas more difficult (too much info exchange leads to similar trading strategies) 3. The most valuable info is the piece that others do not have. This is why its so difficult to get paid for research as unique info does not scale and scale info (published work) is public i.e. not valuable.

Been around for years - its called IM. Not anonymous, but instant and closed - and interactive. Big funds will also have email set ups with different sorting features so that everybody internally in a company will see the notes (debt/equity, telco/tech, an arb guy) might see it.

I'm having trouble seeing how it doesn't just lapse into a slightly more professional version of Yahoo bulletin boards.....

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