James Enck of Daiwa Securities is proposing a new kind of market and fundamental research model, which could pose a challenge to Wall Street firms. James selects three of us Andy, Om, and Martin he sees that we “collectively deliver what brokers’ research typically lacks. All three have very sensitive BS meters, and are not afraid to court controversy.”
There is a business model here, and whether it’s the financial media who seize upon it … Investment banks: you have competition, whether you know/believe it or not. It behaves differently from you, uses different tools, and takes no prisoners. More importantly, its mindshare is growing, and you ought to be scared. What happens when one day your client base wakes up and feels confident enough to say they don’t want your research?
I think the traditional role of Wall Street Research is going to have to change. I think the bursting of the bubble, and the short comings of the banking-research nexus as exposed by the Jack Grubman and Henry Blodgett scandals has made research groups more careful. On top of that, many research groups have shrunk in size and analysts have to track more companies. As reporters, you are essentially doing the job of an analyst, foraging out exclusive information, or opining with smart option – without building financial models.
What blogs have done is basically given many of us the ability to do this in real time. I can only speak for myself – unlike Wall Street research, I don’t have to worry about offending anyone. No personal gains except for paying heed to one of the cardinal sins: vanity. Regardless, the model, however is still evolving. Why? First, the tools are basically not-friendly to us writers and information foragers. I think connecting the dots, or should I say posts, is still difficult. We cannot produce a coherent and perhaps meta-linked research & analysis report using blogs for now. The conversation is disjointed, much like the walkie-talkies. I need a tool to bring everything together in real time. And then add-context. On a more personal note, James wrote:
Om writes about virtually everything, seemingly, and if I’m not mistaken, recently seems to be including more financial results coverage and investment strategy angles
Perhaps now is as good a time, as any to explain the strategy behind this blog, and a bit about myself. (Vanity, thy name is Om!)
Most folks don’t know this, but I started out writing about hard drives, micro controllers and memory chips, the very bottom of the technology food chain for now defunct, Quick Nikkei News. I graduated to covering microprocessors, personal computers, servers, routers, optical gear, optical networks, services and more recently applications. So I have a bottom-up approach to the technology world. Jim Michaels, the legendary editor of Forbes used to say, if you can keep an eye on the tyre production, you can see far and see the automobile production numbers. In other words, “connect the dots stupid.” I live and will die by that credo.
So if it seems that I write about everything, that there is a method to the madness. I guess wireless and wireless data, even in spurts add to the network traffic, which adds to consumption of bandwidth, which leads to new equipment requirement. New applications that suck-up bandwidth, translate in more need for broadband. If microprocessor was the glue of the last generation of technology, broadband is the catalyst of change for the next generation. I see the fast pipes as the ultimate enabler, so everything I post has a one or at most two degrees of separation from that cardinal truth.
James, thanks for your kind words! Reading you every day is a must for me as well!