Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: Re: [CANSLIM] Another Andersen client
Date: Tue, 29 Jan 2002 00:30:44 -0500
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Hi Patrick, I must disagree with you, at least in part. I don't believe analysts at the major wirehouses have ever represented the interests of the retail clients. The major wirehouses generate income in a variety of ways, including investment banking, consulting, mergers and acquisitions, in-house mutual funds, market making, and retail trading. The last category has traditionally been the smallest producer of net profit, to the best of my opinion. A smaller brokerage house, where they are not a market maker, may be less biased even if they do investment banking. But if they do underwriting, there will always be a bias in favor of firms they brought public. Major wirehouses have a retail business line because they must, it's a part of the industry. It is also a handy place to peddle their house analyst's morning opinion and generate sudden volume, especially if they make a market in the stock. With decimalization, the spread on stocks has tightened up so much that firms can no longer make that much trading stocks, so this conflict of interest has been lessened. Tom Worley stkguru@netside.net AIM: TexWorley - ----- Original Message ----- From: "Patrick Wahl" <pjwahl@attbi.com> To: <canslim@lists.xmission.com> Sent: Monday, January 28, 2002 11:03 PM Subject: Re: [CANSLIM] Another Andersen client > He was replying to my comment on analysts, and how they have changing > allegiances since the seventies, when retail customers represented more of the > brokerage's income. Enton is unrelated to that, but the fact that most analysts were > not warning anyone of the seriousness of the problems (some analysts still had buys > on it up to the bankruptcy) may be related to the deregulation. > > On 28 Jan 2002 at 22:32, Spencer48@aol.com wrote: > > > Mike: > > > > I'm not certain what you're saying here. Is the conclusion suppose to > > be that deregulation and increased competition led to the Enron debacle? > > But, if so, and if dereg began in the 70's, why did it take 30 years for a > > financial catastrophe like this one to occur? And if it didn't take 30 > > years-what was the first one? > > > > And does the go-go era of the 90's (stock market wise) evince convincing > > contrary evidence that dereg and increased competition in commisssions is a > > bad thing? > > > > Moreover, I'd hazard that a lot of people including corporate accounts > > and investment bank officers lost money in Enron. That's why it plummeted > > the way it did-because everyone was selling, and no one (except perhaps > > Anderson auditors, and certain officials in Enron) had any idea-since the > > losses were off the books-why. > > > > jans > > > > > > > > > > In a message dated 1/28/2002 9:36:18 PM Eastern Standard Time, > > mikegibbons@proactech.com writes: > > > > << Yes, commissions were deregulated in the 70's and competition and the > > internet have driven them ever lower making the investment banks dependant > > on thier corporate instead of retail clients. An example of the unintended > > consequences of deregulation. Every silver lining has a cloud. > > >> > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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