Are you new here?
If so, you may have missed five or so years of predictions regarding the eventual sublimation of traditional sell-side research. What once was a solid, tangible thing that mattered – morning notes, professional color, earnings estimates and so on – has been slipping into the aether of unimportance for quite some time now. What happened was the large-scale adoption of the social web by the buyside and anyone else with a functioning brain.
We’re talking stocks and bonds and interest rates and markets 24/7 at this point, no one’s waiting for the analysts to publish anymore. And when their calls finally do come out, we swarm the material like hungry piranhas, stripping the meat for ourselves and letting the bones settle where they may. And then the next meal swims by – in the form of a global macro musing or a quantitative run of charts – and I’ll be goddamned if we don’t encircle and devour that too.
We blog it, tweet it, fight about it, break it down, reassemble it, smash it together with earlier reports and internalize whatever we think necessary. Often before the traditional “Market Movers” even arrive at their offices in the morning.
Good luck keeping up with that.
Wall Street’s product is becoming as quaint as the vinyl LP and every bit as modern. There are a handful of exceptions – some major firm strategists and analysts who are using social media to discuss their work and opinions – but again, these are the exceptions. The rest are living in this 1997 world of exclusivity (like it all doesn’t end up online anyway) and seventy-five layers of approval before an opinion can ever see the light of day.
The other day I stopped by the Manhattan office of a friend who sits on one of the largest institutional sales / trading desks in the world. It was lunch time and I noticed all the guys lolling around in their aeron chairs scrolling up and down on their mobile phones. “What are they doing?” I asked him.
“What do you think they’re doing? They’re all reading Twitter – they can’t access it from their terminals.”
What a joke.
It’s like Kodak sticking with developed film. This is a fax machine versus iPad, a bullet train versus a bike.
The vast majority of the sell-side’s research complex is experiencing Death by Twitter. Some of ‘em know it and are trying to figure out how to play, participate and experience the only real-time give-and-take that actually matters. Most of them don’t, however, and are not even trying – because “this is the way we’ve always done things before.”
Best of luck, Trevor.
I’ll be speaking on this topic during a panel discussion at the Securities Traders Association of New York (STANY) 77th annual conference and dinner event next month. Joining me on stage will be Rob Pasarella (DataSift), Joe Weisenthal (Business Insider) and John Melloy (CNBC) – three guys who have understood where this was headed for a long time now.
Speaking of Joe, here’s his take on the topic: