Stoss 69 A few years ago when I ran a large book I photocopied and mailed an analysts prior report to his new research manager at his new job just before bonus time asking why with no new announcements and little market movement why the valuation had changed significantly on a couple of covered stocks. Cynically I suggested the new boy was just massaging a few egos to keep companies sweet. I saw what was hapenning and didn't lose my shirt. Brokers must sometimes forget that they can also make money from brokerage not just corporate massaging.
Amazing how much they tried to talk up resource stocks etc instead of being realistic and cutting some tech stocks down to earth.
It was taken in good humour apparently but a 20% uprating using the same model of the same analyst on the same stock just with a new employer only 4 days later was a bit much. The company concerned who I was in close contact with had a big laugh as well and proceeded to fail to produce even a smidgeon of the blue sky income some thought possible in the models however the expense side was right on the money (huge). They decided not to massage the analysts ego and let him stumble on his own numbers and give no guidance.
This ananlyst has matured and changed jobs twice and every year round bonus time I forward the report to his new boss just for fun. Last year got a call from their "legal council" to confirm that no action was outstanding or pending. No but it should have been. That made my day and as I have said to that analyst that the day he puts out a decent report is the day I won't send his crap to his new employer. i hope one year not to have to send the fax.
T
OSH Price at posting:
0.0¢ Sentiment: None Disclosure: Held
