Skip to main content

The Value/Price of research -- an update

Soooo

I had a very pleasant dinner with a very good friend -- a big cheese in one of Canada premier investment bank -- that has Canada's largest research budget...by far.  I mentioned, en passant, that Nomura had set an annual price of $120,000 for its gold plated research, and that I was thinking that few would pay that kind of money.  He disagreed fundamentally.

In his view, research is not about paper but about access, access to special conference where every American tech CEO is present (you never hear about those conferences -- private and no journalists) they give "prime" investors the CEO's thinking -- that's privileged information (but legal).  Usually these conferences (Goldman has the best) are limited to 50/100 investors -- their top clients which is where the problem arises, in a sense, there are a lot more than 50/100 real investors, and for them this information simply doesn't exist!

My very good friend only though of his 50 best clients - those who, by the way, represent the vast majority of his trading income.  But here is the problem, this represents a massive breakdown in the objective of the market to have the players pay for research., and a level playing field.  Lets not forget that the objective here is to democratize information.

The paying for research is doing the exact opposite; those who don't have the top premium package just get the standard drivel -- for a paltry $200,000 per anum you get research, you get to speak to analysts the usual stuff.  If on the other hand you are a "Black Card Owner"  then you get full access. Because access is all that matters to my friend.  When he thinks of research he only thinks of those 50 client, the others simply don't exist.

In conclusion:  Its interesting that for banks they don't care if anyone wants their research they are welcome to get it, but they don't count anyway.  A different perspective that the regulator has not addressed -- which in fact it cannot address!

Comments

Popular posts from this blog

what people get wrong about tariffs

 The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...

Trump and Venezuela...

The US now owns Venezuela…and not in a good way.  America is not known for its nation building skills, and yet it now owns the disaster that is Venezuela.   Starvation and exodus are the natural progression.   In addition it will become a haven for narco-terrorists, more so than it already was. I am sure that Trump and his friends really thought that little attack very well…I guess that he will now attack Iran now.