Comments on: The Napsterization of Sell-Side Research http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/ Basab Pradhan's weblog about business and life in a 'flat world'. 6 AM Pacific is the best time for a global conference call. Sat, 11 Oct 2008 11:53:58 +0000 http://wordpress.org/?v=2.5 By: Venky http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-6705 Venky Wed, 27 Jun 2007 15:51:02 +0000 http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-6705 As someone from buy side, I can confidently say that the quality of sell side research has gone down in a big way. I don't think most sell side research departments can survive as independent research outfits. Markets are more mature now and no one really cares about the sell side research - sorry, sell side journalese. It is just a matter of time before they become permanently irrelevant. All this ML talk is just a ploy to make their research appear valuable. As someone from buy side, I can confidently say that the quality of sell side research has gone down in a big way. I don’t think most sell side research departments can survive as independent research outfits. Markets are more mature now and no one really cares about the sell side research - sorry, sell side journalese.
It is just a matter of time before they become permanently irrelevant. All this ML talk is just a ploy to make their research appear valuable.

]]> By: Akhil http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5853 Akhil Tue, 03 Apr 2007 07:28:32 +0000 http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5853 Never thought about this issue. Thank you for the post. This trend actually bodes well for companies such as Gridstone, EVS, Copal etc. Never thought about this issue. Thank you for the post.

This trend actually bodes well for companies such as Gridstone, EVS, Copal etc.

]]> By: Basab http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5836 Basab Mon, 02 Apr 2007 14:26:07 +0000 http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5836 Interesting thought. If music bands have varied business models some of which depend upon concerts for revenue, while music downloads are just promotion, perhaps the sell-side industry might also have a variety of different business models. IMO, their challenge is that the cost of research (mostly salaries) is so high, that they don't have too many options when it comes to business models. Interesting thought. If music bands have varied business models some of which depend upon concerts for revenue, while music downloads are just promotion, perhaps the sell-side industry might also have a variety of different business models. IMO, their challenge is that the cost of research (mostly salaries) is so high, that they don’t have too many options when it comes to business models.

]]> By: Srickant http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5829 Srickant Mon, 02 Apr 2007 07:18:36 +0000 http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5829 Hi Basab, What business is sell side research exactly in? 1) Providing insights 2) Providing plain vanilla trading platform? 3) Something totally different? There is another as aspect to the DRM debate.. there have been bands which have used free distribution of music to drive select sales and music tour tickets. You might say that this is bad for the music industry at the CD level, true....if the market does not need them they should become extinct. (Painful) Now, as I understand the true value of sell side is delivered when someone calls the analyst to hear out what he says. The fact that sell side is destroying itself on working with useless preresult/post result updates for primarily delivering useless information is somethign to take note off. I would think that spreading the insight everywhere and ensuring phone calls (the analyst is the differentiator right?) is the way to go. You cannot prohibit information flow. ML did 19 % vs 16% of MSCI? Oh c'mon they should do better if they want ot be in the business. How much did their own trading desk do? Duping investors :D Hi Basab,
What business is sell side research exactly in?
1) Providing insights
2) Providing plain vanilla trading platform?
3) Something totally different?

There is another as aspect to the DRM debate.. there have been bands which have used free distribution of music to drive select sales and music tour tickets. You might say that this is bad for the music industry at the CD level, true….if the market does not need them they should become extinct. (Painful)

Now, as I understand the true value of sell side is delivered when someone calls the analyst to hear out what he says. The fact that sell side is destroying itself on working with useless preresult/post result updates for primarily delivering useless information is somethign to take note off.

I would think that spreading the insight everywhere and ensuring phone calls (the analyst is the differentiator right?)
is the way to go. You cannot prohibit information flow.

ML did 19 % vs 16% of MSCI? Oh c’mon they should do better if they want ot be in the business. How much did their own trading desk do? Duping investors :D

]]> By: Krishna http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5819 Krishna Sun, 01 Apr 2007 05:56:26 +0000 http://6ampacific.com/2007/04/01/the-napsterization-of-sell-side-research/#comment-5819 Basab, A well intentioned article. IP protection indeed translates into bottomline any day and is necessary to safeguard the exclusivity of insights drawn by Sell-side initiatives. But taken in isolation, how exclusive are these insights itself - especially when one-on-one consultations and management meetings are either forward looking statements or just plain PR campaigns ( hence not taken at face value by investors, unless are of the nature of insider information itself which is downright illegal anyway)as are becoming less and less relevant ? Don't you think in these days of open source access ( we have investopedias together with free research sites available)to undifferentiated high quality research that is freely available, privity of information is at best ephemeral ? After all this, within a given broad parameter of Fund/Investor focus (of say stocks with a market cap range and in sectors of choice), random theory still holds very, very good ! Basab,

A well intentioned article. IP protection indeed translates into bottomline any day and is necessary to safeguard the exclusivity of insights drawn by Sell-side initiatives.

But taken in isolation, how exclusive are these insights itself - especially when one-on-one consultations and management meetings are either forward looking statements or just plain PR campaigns ( hence not taken at face value by investors, unless are of the nature of insider information itself which is downright illegal anyway)as are becoming less and less relevant ?

Don’t you think in these days of open source access ( we have investopedias together with free research sites available)to undifferentiated high quality research that is freely available, privity of information is at best ephemeral ?

After all this, within a given broad parameter of Fund/Investor focus (of say stocks with a market cap range and in sectors of choice), random theory still holds very, very good !

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