Using the sellside effectively
Have trawled this site for a while, but haven’t seen a comprehensive discussion of this anywhere.
How do you all use the sellside? I’m asking primarily in a pod context.
Thanks
Have trawled this site for a while, but haven’t seen a comprehensive discussion of this anywhere.
How do you all use the sellside? I’m asking primarily in a pod context.
Thanks
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I use the SS to get up to speed on a new name quickly. Once I understand how good SS analysts are thinking about a name, I do my own diligence to develop an opinion and compare/contrast with that of the SS. I then read everything that is published by SS analysts on that name going forward hunting for additional tidbits that may impact my view. The goal is to be as well-informed as possible.
I also talk to SS analysts to learn what they are hearing from other investors on the name, how much buzz there is and how they are thinking about valuation/inflection points. I don't believe the best BS analysts do better work than the best SS analysts. I think BS analysts become good by getting exposed to good work over time and good SS analysts can and do produce comprehensive and prescient investment analysis.
Dan Ives must be excluded from this statement
Good work > making money
The best buyside analysts know how to make money and manage risk.
The best sellside analysts have good access to mgmt, solid buyside network, competent juniors to run models, and understand what makes a given stock work.
I agree with this. This is the difference between the SS and BS jobs. After working through a number of investment opportunities and seeing the results, BS analysts can start to spot patterns.
Exposure to the entire universe of opportunities (in a given sector) allows BS analysts to develop investment acumen much more quickly than SS analysts whom are necessarily limited by their coverage universe.
Plus the emotional tax paid when you have risk on drives a completely different type of focus and judgement that you cannot replicate if you’re reporting the news and publishing content.
Research analysts are in the content business.
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