Cover image for The pied pipers of Wall Street : how analysts sell you down the river
Title:
The pied pipers of Wall Street : how analysts sell you down the river
Author:
Cole, Benjamin Mark, 1955-
Personal Author:
Edition:
First edition.
Publication Information:
Princeton, NJ : Bloomberg Press, [2001]

©2001
Physical Description:
xiv, 234 pages ; 25 cm
Language:
English
ISBN:
9781576600832
Format :
Book

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Summary

Summary

Explains why investors should not rely too heavily on the opinions of brokerage firm analysts, arguing that securities analysts often place the interests of the firm ahead of the interests of regular investors.


Author Notes

Benjamin Mark Cole has been a financial journalist for 20 years. He has written for numerous publications, including U.S. News and World Report, The Los Angeles Herald Examiner, and The Los Angeles Times. In the '80s he helped launch the daily financial paper Investor's Daily (now Investor's Business Daily). For the Los Angeles Business Journal, he currently writes the "Wall Street West" column. The recipient of various awards and citations for his writings over the years, Cole is a graduate of the University of California at Berkeley, with a master's degree from the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin


Reviews 2

Library Journal Review

Books like Mark Dempsey's Tricks of the Trade (LJ 1/98) have exposed the ways of brokers. In this new cautionary work, financial writer Cole focuses his attention on financial analysts, who are supposed to evaluate objectively the investment potential of securities. Cole contends that in the best of times analysts were never very successful in making predictions, but in recent years they have become shills for their investment banking departments. He further points out that the 1975 deregulation and consequential reduction of brokerage fees forced brokerages to make most of their money through investment banking. Analysts, while theoretically giving independent opinions, in reality now exist to help their firms' client companies to sell new stock and support their stock prices. Cole argues that this has led to almost incessant optimism among most analysts. His book is easily read, and his points would be useful for all investors to consider. Recommended for all public libraries and to academic libraries where there is interest. Lawrence R. Maxted, Gannon Univ., Erie, PA (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.


Choice Review

While an alleged firewall exists between financial analysts and investment bankers, the pressure to provide positive security recommendations results in a conflict of interest for security analysts. Cole, a financial journalist, tells a series of stories that illustrate the fleecing of investors resulting from financial analysts' bias to push securities. Fees raised by underwritings and corporate consulting fees along with the substantial positions acquired by mutual funds and pension plans preclude financial analysts from recommending selling securities that would inflict losses on these profitable clients. Virtually all recommendations are "buy" or "hold." A "sell" constitutes less than 0.3 percent of all recommendations. Cole covers "pump and dump" schemes, "flipping," "spanning," financial analysts who manipulate stock prices, and the SEC's "feeble" enforcement of security regulations. He devotes a chapter to "independent analysts ... who conduct fine research," including Howard Schilit's work on accounting irregularities, Mark Hulbert's The Hulbert Financial Digest, David Dremen's new contrarians, and analysts from Standard & Poor's, and the Value Line Investment Survey. Highly recommended for personal investors and general readers wanting an accessible work on this topic. Investment professionals, who are knowledgeable about the issues raised in this volume, and academicians, who want empirical evidence, will not find this volume of interest. H. Mayo The College of New Jersey


Table of Contents

Acknowledgmentsp. ix
Prefacep. xi
1 The Man on the Telephonep. 1
2 An Industry Transformed: from Sleuths to Salesmenp. 41
3 Compromised Relationshipsp. 67
4 The Pied Pipers with Golden Flutesp. 97
5 The Pied Pipers (Brass Flute Versions)p. 131
6 The Shortsp. 153
7 The Good Guysp. 179
8 To Regulate or not to Regulatep. 203
Notesp. 221
Indexp. 227