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Why financial research is “noise” not value add

In Financial competency on 04/08/2014 at 5:30 am

It’s not every day that an analyst concedes that the bulk of financial research in existence is merely “noise”, with not much intrinsic value. But Stefano Natella, Credit Suisse’s head of equity research, is not your typical analyst.
With a penchant for existential questions – “I like that philosophical question (about) why research exists” – Mr Natella is keen to change the way clients view, seek out, and pay for financial analysis.
“I’m very candid (about this) – I don’t think there’s a lot of value in making comments on earnings. Or the value (expires) two minutes after it has been reported,”  …
He uses an example from the telco sector: “If you give me the press release of SingTel’s quarterly earnings, I can write you two pages of a research report saying (its performance was) slightly ahead of market (expectations), and it looked very good in this area, and clients paid (this amount) of fees, and so on. I may know very little about SingTel, but I (could do it reasonably well).

This appeared in BT few months ago

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