Conflicted Analysis
Bill Burnham, a former Wall Street analyst, provides a thoughtful rundown on the conflicts that exist at industry analyst firms. Bill’s former industry was regulated into disclosure by Elliot Spitzer but many of the same conclusions can be applied to the likes of Gartner, Forrester and Jupiter. The paradoxical problem is that on Wall Street greater transparency actually led to a lower quality of research because eliminating the conflict of interest between banking and research meant that the analysts pay dropped dramatically. If only mums and dads knew that ‘hold’ means ’sell’.
