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Up0
If you are reading this blog post I am going to assume that you like finance. And you will read this blog post till the end. When you finish reading, like this blog post so I know! (No, don’t scroll down and like it right away.)With the CFA exam over we all have collectively reclaimed our weekends and evenings. And are doing things that still doesn’t feel natural. Like going out in the evening. But I’ve noticed some of us are looking for something to keep us intellectually challenged. Like Leonardo Da Vinci said, “Iron rusts from disuse; water loses its purity from stagnation … even so does the inaction sap the vigor of the mind”.
I’ve been tossing around the idea of crowdsourcing research reports. The ethics material issued by CFAI talks about a chinese wall set up between the research side and the investment banking side of the firm but I when I had access to Bloomberg and read those said research reports I found them to be tedious and boring. Not to mention how many reports I found that looks strangely like reports issued from other firms. After reading The Confessions of a Wall Street Analyst I wonder how reliable the reports are. Even if there is a strong chinese wall I think there are other problems that might be afoot. Such as not enough resources or maybe reputation – imagine sinking a huge M&A deal because of your report.
And this doesn’t even mention that fact that it has been found that professional industry analyst fall short in their ability to forecast compared to stock enthusiasts. I found this article interesting. I also find the website in general to be interesting.
What are your thought on crowdsourcing research reports and its feasibility? I’d want the end product to be retail investor friendly and hopefully summarize all the key points on a one to two page report.
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Up5
I suppose for it to be useful, retail investors have to ‘trust’ it (i.e. there must be a system to vet quality for crowdsourcing). And to trust it perhaps one needs to show some analysis/numbers to support the claims (as an appendix to the 2 pager summary).
That said, I’m aware of new research only houses popping up (in London at least) due to the crisis and Chinese wall issue. They seem to be doing well!
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Up5
I’m just bouncing ideas. The more the merrier. I wasn’t pure crowdsourcing but I think that is a far off goal for now.
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Up5
Why not just pick your favourite company. And start analysing/discussing now? I think it’s interesting to see how you all apply and debate about valuation etc 😀
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Up4
I find the idea fascinating although I’d imagine there are regulatory hurdles to clear before something like that could be offered. I’m certainly open to exploring this further.
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Up4
With the advent of big data, data mining and availability of open source softwares for implementation, I think its very feasible and interesting subject to pursue.
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Up3
If trust is an issue than this can start off as a “lets apply all that we have learned” to build up a database of information and worry about what retail investors think when the time comes. It is very possible that we veer off that path altogether and make it more about learning and refining the techniques of investing because like CFAI does talk about valuation models constantly but I think that taking dividend projects and a required rate of return and growth rate is just not enough to value a company. So people who want to break into an industry it might be good just to learn some tools here?
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Up3
@sankrutimehta I had something similar in mind. I like following the Macro market perspectives, sovereign debt and stuff. However, I am trying to figure out where to get started. Should I try and fish out information regarding certain companies and their prospects or figure out the valuation forecasts of securities alongwith the macro environment of the concerned country?
Maybe if anyone has a background in research (Fixed Income or Equity) can help me out with developing a basic structure of a research report.
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Up3
@AjFinance and @sankrutimehta would you guys mind collaborating of do you want to do your own thing? If you guys want to collaborate please message me and hopefully we can set up a basic structure. @AjFinance I like how you are more quantative I usually prefer narrative stories to defend my stock picks.
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Up2
@Sarah: I have been toying with the thought of starting my own blog soon with updates and posts twice a week…one being a theoritical explanation / summary of any one concept relevant to the retail investors; other one being my opinion and forecast. I do intend to offer paid services over a long term horizon if all goes well. If not, at least I could put this on my resume to break through the research domain.
I have started working on my first post and intend to put in a one pager with a couple of weeks!! lets see how it goes 😀 -
Up2
sankrutimehta”>>@Sarah: I have been toying with the thought of starting my own blog soon with updates and posts twice a week…one being a theoritical explanation / summary of any one concept relevant to the retail investors; other one being my opinion and forecast. I do intend to offer paid services over a long term horizon if all goes well. If not, at least I could put this on my resume to break through the research domain.
I have started working on my first post and intend to put in a one pager with a couple of weeks!! lets see how it goes 😀
@sankrutimehta you can host your blog here if you want, just like @sarah and @marc. Let me know if you’re interested 🙂 -
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Up2
Isn’t that a bit like http://seekingalpha.com/ ? Also, the quality and independence of IB research has come a long way since the dot com bubble. And writing a report without having a model backing up your Price Target wouldn’t be wise, no serious investor is interested in just a narrative. Lastly in relation to the dryness of the reports, yes they can be sometimes, but if it is your job to know that much detail about a company, the reports are very good at helping with that. And some analysts write very well. Granted, some don’t.
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Up1
No doubt it’s happening on this side of the Pond as well. I’m just not in the business right now. One of those zigs (or was it a zag) we were talking about last week. :))
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Up1
@sankrutimehta do you have a model you plan on using for your forecasts? I don’t really have experience with research reports other than academic so I’d love to hear from a professional.
Also I obviously am comfortable with US stocks (and Canadian) which market were you going to forecast on or where you planning on marco forecasts?
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Up1
@Sarah @AjFinance: I myself do not have first hand experience in research. Though I do have some reports on Indian markets which I was planning to follow…I wouldn’t mind collaborating…the more the merrier..plus the brain storming can add more value…I would drop you both a message and we guys can discuss it offline 😀
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