Grab your hobnobs, time for my second “Behind the City Curtain” thread. This time we’ll move on to something more interesting. “Sell Side Research – What It Really Means”.
Buffett/Munger quotes are cheesy but this one is particularly relevant - "Show me the incentive and I will show you the outcome". Everyone alters their work/view to get themselves the best possible outcome and City analysts are no exception. So, how do they get paid?
Firstly, analysts are NOT paid for being right / accurate. They'll get a base salary and then bonus (which can be 100%+ of base) will be determined on their yearly ranking in various surveys and the number of interactions they have with fund managers (FM’s)
Grab your hobnobs, this is the first entry in my “Behind the City Curtain” series where I explain various processes from my perspective as an investment banker forcussing on UK companies. I’ll use this to link to all my ‘stories’ so bookmark it!
I thought this should be the first post so you can understand the way the City talks to understand what the City is talking about…. If that makes sense. I’m going to set out the day to day terms we use, what they mean, and whether you should be thinking the same way.
City Jargon – what terms do you need to know? Most of you already know this but I thought it’d be helpful to make sure everyone starts from the same place before I start covering some more technical stuff….