Over the weekend, in response to my post regarding the CSFB's Special Situation Conference, a reader sent me this lovely sentiment (my redaction):
I think this conference should be renamed the "annual clear our ****** inventory conference"
Advice from Investment Banking Houses: There are objections of another kind to the advisory service of an investment banking house. An institution with securities of its own to sell cannot be looked to for entirely impartial guidance. However ethical it aims may be, the compelling force of self-interest is bound to affect its judgement. This is particularly true when the advice is supplied by a bonds salesman whose livelihood depends on persuading his customers to buy the securities that his firm has "on its shelves."
- Read all Ks, Qs, 8ks, proxies
- Read all transcripts from quarterly reports, events, etc
- Read news items about specific company and competitors going back the past year +
- Talk to competitors, people in the supply chain, former employees, etc
- Determine a reasonable set of assumptions for business and the associated value of the business. Write these numbers down before proceeding to step 6.
- Talk to the sell side/ read sell side reports to see if the "market" assumptions are dramatically different than my own
- Buy / Sell
- Instead of conflicts, he/she would always be independent
- Instead of opinions, he/she would provide the most salient, unearthed facts that no one else was talking about
- Instead of hugging the consensus or guidance, he/she would step out and make a call that was bold and unique
- Instead of pitching the same ideas investors hear every day, he/she would present unique situations to investors
- Etc Etc