Sell Side Buy Side

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Sell SideBuy Side
Up Side Down Side

• Learning to Speak
• Investment
• Management
• Joan Williams
• March 6, 2002

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Sell Side
PART ONE
Buy Side
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Industry Organization
Sell Side
Buy Side
analyst
analyst
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Industry Organization
Sell Side
Buy Side
Company
Industry
Sell Side
Company
analyst
analyst
Economy
Technical
Analysis Investment Decision


Recommendations Analysis
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The World of the Sell-Side Analyst
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Sell Side Major Players

• Investment Banks
• CSFB, Morgan Stanley, Merril Lynch, JP Morgan,
  Bank of America, Deutsche Banc, Bear Stearns,
  CIBC
• Company and Industry Reports
• Regional / Industry
• Ex. Simmons in Energy

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Sell Side Goals

• Produce and sell research
• Call It
• Reputation / Credibility
• Go-to analyst
• Expert status / air-time
• Funny Titles

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Sell Side Research

• Interfacing with Company Management
• Conference Calls
• Company
• Conferences (ex.- Extreme Networks)
• Robertson Stephens Technology Conference -- San
  Francisco, CA Wednesday, February 27, 2002 Time
  300 p.m. PT (600 p.m. ET) Presenter Gordon
  Stitt, Chief Executive Officer
• Merrill Lynch Global Communications Conference --
  New York, NY Wednesday, March 13, 2002 Time
  1200 p.m. PT (300 p.m. ET) Presenter Gordon
  Stitt, Chief Executive Officer
• Economic and Industry Data
• Credit Ratings

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Sell Side Reports

• Company / Industry (Sector, SubSector,
  Commodity)/ Economy / Theory
• Report team
• Earnings models
• Supporting analysis
• Expectations
• EPS and CFPS (First Call / consensus)
• Investment Recommendation

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Sell Side Clients

• Internal and External Buy Side
• Investment Management
• Intermediaries
• Investment banking analysts
• Chinese wall / conflict of interest
• Bias
• Buy doesnt mean buy
• Dropping coverage

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The World of the Buy-Side Analyst
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Buy Side Major Players

• Investment banks
• Institutional and Private Wealth
• Mutual Funds
• Portfolio Managers
• Institutional and Private Wealth

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Buy-side Sell-side relationships

• Buy-side pays for sell-side relationship
• Go-to people
• Often share models or background information
• Daily conference calls
• Road shows (usually following report)
• Often internal (I-banks)

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Buy-Side Research

• Build own earnings models
• Utilize Conference Calls
• Daily sell-side calls
• Company earnings
• Company guidance
• Conf. Calls and Road Shows
• Real-time market trends
• Technical analysis (shhhh.)

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Buy Side Flow of information

• Flow up to PMs and Fund Managers
• Sometimes same people
• Assigned to SP sector and strategy group
• Internal meetings and reports

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Buy Side Brokers and traders

• Access and timing
• Two-way information flow

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Buy Side Performance Measures

• Fund Portfolio marketing results
• Benchmarking

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Up Side
PART TWO
Down Side