Latest WSJ Best on the Street Rankings

I just saw the ranking in print. I'm pretty excited where everything shook out.

Top 4

1 Standard & Poor's (with 10 out of 79)

2 William Blair (with 7 out of 32- highest batting average and top ranked investment bank)

2 Robert W. Baird (with 7 out of 42)

2 Raymond James (with 7 out of 55)

http://online.wsj.com/public/page/best-on-the-str…

Discuss.

P.S. I thought the WSJ looks at the "batting average" rather than absolute number of Top 5 ranked analyst.

 

Clearly this proves that BB does not always mean the best research (i.e. best experience). It may pay well initially but the experience you obtain working for a smart analyst will benefit you much more in the long-run.

... of course I may be biased as I work for one of the analysts that got ranked this year from a no name shop...

oh and let's hear it for BAML bringing up the rear (1 for 68)...

Smokey, this is not 'Nam, this is bowling. There are rules.
 

I think this board has done a pretty good job of making it clear that while a BB name on your resume may look good, you get better experience and look better to the people in the industry working for a top analyst.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 
Best Response

That's a BS statement.

II is nothing more than a BB popularity contest. There are plenty of better analysts at non-BBs that don't have a full-time market department begging the buy-side for votes.

The II ranked guy in our space is nothing special.

I have tons of qualms with how the WSJ calculates the ranking but its ignorant for you to say that II is the only thing that matters.

I've read some of your previous posts and I agree with you often but you seems to have an unjustified admiration life of a sell-sider at a BB (versus a boutique). I won't say anymore. Let's not change this to a BB vs. boutique pissing contest- plenty of those exist already.

Follow me on Twitter: https://twitter.com/_KarateBoy_
 

I work at one of the biggest long-only asset managers, and I completely disagree with you. First of all, while I don't disagree with you that II is a contest that shows popularity based on votes from buysiders, that's exactly the point why II is THE RANKING. The whole point of existence of sellside research is to cater to us buysiders. So if an analyst is popular, he's successful, because he is bringing business in, regardless of how right/wrong he is.

I can't speak for the entire buyside, but at least for most large firms that dominate a huge % of market volume, we really don't give a shit about how often an analyst is right in their calls. We don't give a flying crap about their calls. That's why we have our own research analysts. The whole purpose of sell side research to us is that sell side researchers act as glorified fact checkers and data providers. The sell side research reports help us gather information on stocks we don't currently cover, where we can pull the numbers etc with ease and make our own investment decisions. Whether you are right or wrong on your calls are irrelevant to us as long as your numbers are right.

KarateBoy:
That's a BS statement.

II is nothing more than a BB popularity contest. There are plenty of better analysts at non-BBs that don't have a full-time market department begging the buy-side for votes.

The II ranked guy in our space is nothing special.

I have tons of qualms with how the WSJ calculates the ranking but its ignorant for you to say that II is the only thing that matters.

I've read some of your previous posts and I agree with you often but you seems to have an unjustified admiration life of a sell-sider at a BB (versus a boutique). I won't say anymore. Let's not change this to a BB vs. boutique pissing contest- plenty of those exist already.

 

This section of the WSJ really needed a TLDR

"The right to have children should be a marketable commodity, bought and traded by individuals but absolutely limited by the state."—Kenneth Boulding
 

The WSJ number is in some ways more clear cut and meritocratic than II. This is coming from someone who might have helped his team keep a #1 ranking for two or three consecutive years. Bottom line is that the WSJ methodology clearly and unambiguously favors stock pickers who produce results while II doesn't do that necessarily.

This obviously is a sample with a lot of noise, but it's more than a mere pat on the back. Congrats to S&P, William Blair, Baird, and Raymond James.

 

The above reply also applies to this. Your rationale makes sense if the big players in AM actually care about these calls. Fact is, we don't. That's why II matter more than this "meritocratic" ranking.

IlliniProgrammer:
The WSJ number is in some ways more clear cut and meritocratic than II. This is coming from someone who might have helped his team keep a #1 ranking for two or three consecutive years. Bottom line is that the WSJ methodology clearly and unambiguously favors stock pickers who produce results while II doesn't do that necessarily.

This obviously is a sample with a lot of noise, but it's more than a mere pat on the back. Congrats to S&P, William Blair, Baird, and Raymond James.

 
What-to-do-What-to-do:
The above reply also applies to this. Your rationale makes sense if the big players in AM actually care about these calls. Fact is, we don't. That's why II matter more than this "meritocratic" ranking.
My point is that II is a trailing indicator, like unemployment. One year at the top of the list could be a fluke, but if S&P manages to follow up with ten straight years at the top of the list and there is a profit to be made from being the first to legally know and trade on S&P's ratings changes, it is difficult to see how S&P will remain out of the top five in II over that period.

Generally, the rankings in II aren't a big surprise. Most folks would probably feel comfortable even making predictions about their 2012 rankings. WSJ's rankings, on the other hand, are harder to predict.

 

I'm going to have to agree with Dank on this one. While it is a nice honor, II is probably the only thing matters at the end of the day. My boss was on here last year and it didn't mean anything. For my sector this year, a guy I've never heard of from a firm I've never heard of won this award. How the hell can that be possible? There are so many other factors that go into what makes a good analyst outside of stock picking, which II more or less takes into account. Yes, II is flawed for being a popularity contest at times, but popularity does get you paid as an analyst and as a firm.

Edit: I also work at a boutique/MM so I'm not sounding off in favor of BBs here. I think this award is even more irrelevant for the associates who work for the ranked WSJ analyst as opposed to an II analyst.

 

Karate, it's not BS. I also work at a MM/boutique and my analyst isn't ranked by either WSJ or II. The name of the game is gaining respect from the buyside and getting paid, and II best measures both. As an associate, being on an II ranked team is worth 100x more than WSJ. Most people just disregard WSJ, Starmine, anything else. While it's great to be a good stock picker or accurate earnings estimator, that isn't what brings in dollars. Buysiders pay far more for corporate access and analyst interaction than your notes, recommendations, estimates, etc.

 
Dank Nugs:
Karate, it's not BS. I also work at a MM/boutique and my analyst isn't ranked by either WSJ or II. The name of the game is gaining respect from the buyside and getting paid, and II best measures both. As an associate, being on an II ranked team is worth 100x more than WSJ. Most people just disregard WSJ, Starmine, anything else. While it's great to be a good stock picker or accurate earnings estimator, that isn't what brings in dollars. Buysiders pay far more for corporate access and analyst interaction than your notes, recommendations, estimates, etc.

I agree with everything said here. II is the only thing that matters. The buyside does not sit around waiting for sellside Analysts to tell them what to buy; that is not how it works. Corporate access is very important (this means introducing the buyside to management), as is being very well connected so you know everything that is going on in the industry. And working for an II ranked Analyst is far better than working for a WSJ ranked guy.

 

I want to clarify that I mean absolutely no disrespect to anyone in sellside research. They obviously serve a purpose and I would be the first to say that my job would be a lot harder without being able to have information on almost any significant names in my sector at my finger tip whenever i need them.

However, I am just laying out the reality that almost all sizable buysiders with at least some dedicated research workforce don't care about the analysis/calls in sell side reports at all, and this is even more true for the biggest players. So being correct really doesn't mean as much as some people in this thread think.

The ideal sell side research providers from our perspective are ones that provide large volume of research and extensive sector coverage. But the irony is that this is also exactly why we take any sellside analysis with a grain of salt. We recognize the fact that volume matters a lot more than quality/being right on the sellside. Sellside researchers get paid by the volume they bring in (either by subscriptions or trade generated), and this is not really a function of being right, but being accurate in their information and providing extensive coverage. Buyside researchers get paid by being right (at least relatively, since obviously your PMs still have to like you)

 

Thanks for the insight.

I tend to think that some of the best stock pickers have the best access to management. Also, there are a few analysts at my firm that I believe are the best in their space but have never been II ranked.

While, in retrospect, it makes sense that popularity is important, it still seems that II is only a ranking between BB banks. That's different from saying that analyst at BB banks are the best.

Lastly, going off of Wannabedude's comments. Our most sophisticated clients, the Citadels, SACs, Wellingtons, etc... at time can get more out of management than we can if they're already a significant shareholder.

Follow me on Twitter: https://twitter.com/_KarateBoy_
 

That's awesome Ray, must be a really good learning experience

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

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