Is it worth it ??

There is always a feeling of lowness in this part of the calendar year when most of the numbers are out and the earnings call of various companied start to pour in. In-between the numerous meeting and page over page of valuation writeup of visit –review notes and strategic plans some time you feel like a joker in a circus playing his part for some measly peanut butter jam.

I was in a similar state of mind when I came up on this article by Toughee who regularly comes up with some brilliant piece. So here is one from the recent post that most of the Investment Banking pros might take a feel to.

“I still wasn’t convinced, until Bob whispered in my ear what I would make in the first year. It was about three times what I was paid at Bell Labs. I stopped protesting so loudly. He then said “And that’s for being right just 51% of the time,” Andy Kessler recounts in his book, Wall Street Meat - My Narrow Escape from the Stock Market Grinder. Kessler was a rank outsider on Wall Street, having come in as a semi-conductor analyst.

Now, what exactly is the role a stock analyst fulfils? At a very basic level, an analyst is supposed to have an opinion on the stock that helps investors make a decision whether to invest in that particular stock. But it is not as simple as that.

“Companies report earnings once a quarter. But stocks trade about 250 days a year. Something has to make them move up or down the other 246 days. Analysts fill that role. They recommend stocks, change recommendations, change earnings estimates, pound the table - whatever it takes for a sales force to go out with a story so someone will trade with the firm and generate commissions,” writes Kessler.

And what does it take to become an analyst on the Wall Street? “Let’s start with the basics. First, there are absolutely no qualifications whatsoever for an analyst job. I’ve always thought that a monkey could do the job, and many do. There are very few analyst training programs, and no obvious way to get a job as an analyst. Most are in the job by accident, as I certainly can attest to.” he writes.

Over time, Kessler was able to form an opinion on analysts in the business. “By watching other analysts in action, I figured out there were three types of analysts. There are: 1) those who know somebody in their industry, 2) those who know their industry and 3) those who don’t know anybody or anything. Lots of analysts had industry contacts - perhaps CEOs who they were buddies with or someone in the CFO’s office who was feeding them information.”

So, how do analysts who really do not know their industry survive? As Kessler writes “Though I was starting to be right on my stocks, I was increasingly convinced it didn’t matter. I looked around the research department, and noticed that very few analysts were right about anything. The job of an analyst has more to do with impressing everyone they come in contact with, and less to do with stocks. At one meeting I had with Fred Kittler, a portfolio manger at JP Morgan, he paused, looked me in the eye and said, “You realise, you are not in the analysis business, you are in the entertainment business.”

So ultimately you end as a burn out chasing Alpha for somebody. Ultimately one fine Monday morning there is a pink slip waiting for you just after you come in from your Honeymoon.

This is a typical Investment Bankers life..phew

A new feel

Its Aadi season and you have lot of offer on the cards. So I thought why not an Aadi offer for my blog. It has been a total neglect for a long time , so though of dust up the blog and included a new counter and global tracker to add that extra fizz.

That's not all we have more in store ... Couple of earlier blog rolls that I have in the HOT links have been pruned and fresh ones added. Of the new ones that I have added are Nasia and Arthi’s blog. These ladies give a whole new perspective and are quite a regular blogger so you have a thing or two other from them.

Nikil and Lijo have been moved out while Sara and SK find a place in. Nikil and Lijo have been a bit tight as the new found workplace firewalls are a hindrance to their creative side. So to compensate I have included Sara who is bound to bounce you out of your chair and SK with his SK-ism will kindle your grey cell to the extent that you won’t suicide.

Rohit has been maintained as I feel that he is bound to make a come back, I feel his job at Fever FM takes away most of the waking hours. Let me check if his mobile blog is up.

Also have added couple of investment blog to bring us back to monetary world.Couple of them mind sound too techie but I suggest that you stick on and keep reading and sure it will grow on you.Most of try and avoid money matters but a small dose of this kinda reading will be of sure help in the road ahead in life. This I hope will stand you in good stead and possibly so that you wont fall for the ULIP misselling that some advisors might come up with even without asking what your risk profile is !! phew

Yeah! you must be hungry after reading all this so to pep up things have included couple of food blog as varied as American, Continental and Indian American.

Hope you will like the new blog roll.