There’s been a really interesting meme going around recently about the effects of blogs on traditional Wall Street research. Om Malik gives a good overview of the topic:
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.…
It’s pretty clear to me that just like the computer industry in the late 80s and 90s, and the telecommunications industry today, the brokerage business is beginning to undergo a transition from a vertically integrated model dominated by large monolithic companies to a horizontally layered model with leading providers dominating each layer, but nobody dominating more than one layer at a time.
He also has a post with links to several other posts in the meme. Like I said this morning — interesting times!
Oh, this post may be of interest to a few of you who are down with all that fundamental mumbo jumbo (Duru!) — Open Invitation: Forming Mosaic Equity Research Group
(via A VC)
