Tip Toeing through the Tulips-Getting a Strategy View 'Out There' Without bruising too many egos: Part 1: Posing Questions,

Ok, so in one published post already, and in many more subsequently I discussed recommendations and the various minefields involved, and why the whole business of stock recommendations is a 'tangled web' which at the same time needs some 'unpicking', but is a tangled web for a reason.

But what about the practical point of how to kick off a 'Strategy Product' in an imperfect world, which is not going to get perfect any time soon.

As you pointed out, you want Jefferies USP to be 'bottom-up' research, you don't want some big 'ego' 'Strategist' coming in and upsetting the boat, but you still want a strategy product.

So how can you go about it?

Posing questions not giving answers

One approach which is not a bad starting point is to start out not as a 'guru' but as a 'student', a seeker of truth.

'Ego' is an interesting thing. It is ultimately all about power and how you want to be seen an influence the world. 'Masters' are accepted as such. People seek them out, defer to their opinions and respect them. Natural students  suppress their egos in the hope that 'masters' will instruct them. So far, no 'Egos'. The problem is always when students feel they want to start asserting themselves, proving themselves to their masters if you like. Or when people aspire to be 'masters' and compete to get recognition. If only it were like the great David Caradine's 'Kung Fu' series and it was just being a question of 'snatching a pebble from my hand' to determine when student became 'master' and then just pissed off when told 'time for you to go'. As we all know in the City, as just about any where outside the idealised Buddist Martial Arts Monastery, 'Masters' have plenty of people willing to slag them off as rubbish when they get it wrong, and 'Students' have headhunters willing to stoke their impatient for a higher basic and/or bonus!

Nevertheless, it is worth bearing in mind the old 'Eastern Philiosophy' trick of approaching things with humility. A strategy document, at least initially, could basically be set up in terms of posing questions, rather than giving answers.

What you may find here is that this is a good start, but not where you are going to end up. Look at your document as 'lighting a candle to find the way' for the rest of the department.

'Research', 'Analysts', 'Recommendations' ....'illogical' says Dr Spock!

They generally call the department 'Research'...

They generally call the people who work in it 'Analysts'...

'Analysts' are generally expected to publish 'Recommendations'...


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But if it is called 'Research', why are they called 'Researcher' and why don't they just publish 'research'?...

...Or if they are 'Analysts' why isn't the department called 'Analysis' and the output 'Analysis'?...

...And should 'Researchers' or 'Analysts' be making 'Recommendations'....isn't that the job of 'Investment Advisors?

And isn't the first rule of 'investment advice' that it is supposed to be that it is tailored to the client? ...

...And does it make sense to 'publish' recommendations, when it they are supposed to be investment advice, which is supposed to be tailored to the individual client?

...So shouldn't 'Recommendations' be handed out to the handed out by 'Investment Advisors' working in, say, a department called 'Investment Advice'?

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In a logical world maybe, but this is the cut and thrust world of investment, of investment banks and stockbrokers, institutional investors and hedge funds......


.....so before you start to try and think how to tie together 'top down' strategy with 'bottom up' stock research you need to sit back and think a bit about how we have got this jumble...and why it is in a jumble...

...For clear thinking we maybe need to straighten things out....

...but for the 'real world' we might need to tangle them back up....


....Either way if you are reconfiguring how 'top down' strategy' and 'bottom up' research work together you'll need to probably do both!