Re: [CANSLIM] Another Andersen client

From: "Patrick Wahl" <pjwahl@attbi.com>
Subject: Re: [CANSLIM] Another Andersen client
Date: Mon, 28 Jan 2002 22:49:36 -0700

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Well, we both agree they aren't doing anyone a lot of good these days.  The 
seventies were a few years before I had any business awareness, so I only know 
what the fellow on CNBC was saying today regarding that era.

On 29 Jan 2002 at 0:30, Tom Worley wrote:

> 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.
> > >   >>
> > >
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> 
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