the revamped Google Finance

I hadn’t realized how dependent I’ve become over the past ten years on the Google Finance page.  Google Finance’s debut coincided closely with my retirement from my job as a global equity portfolio manager.  I found that GF met enough of my personal money management needs that I didn’t miss my $26,000/year Bloomberg terminal much at all.  (The ability to see a company income statement dissected in a way that revealed major customers and suppliers–and their relative importance–came to
Bloomberg later.  Assuming it’s still there, that’s a really useful feature for a securities analyst.)


What I liked about the old GF:

–everything was on one page, so I could take in a lot of information at a single glance

–it contained information about stocks, bonds and currencies, so I could see the main variables affecting my investment performance grouped together

–there was a sector breakout of that day’s equity performance on Wall Street

–I could add new stocks to a portfolio list easily, and thereby be able to see what was going up/down for a large group of stocks I was interested in

–I could compare several stocks/indices on a single chart, and vary the contents of that chart–and its timeframe–easily.


The charts themselves were not so hot.  But I could either live with that or use Yahoo Finance.  (I have a love/hate relationship with charts, in any event.  My issue is that stretching the price and/or time axes can change a bump in the road into a crisis and vice versa.)


The new Google Finance?


–All of the stuff on my “likes” list has disappeared.

–The Dow Jones Industrials–a wacky, irrelevant index whose main positive point is that it’s easy to calculate–features prominently in coverage of the US.

–The Sensex has been consistently listed as a top-five world index, even though India is an insiders market that’s extremely difficult for foreigners to access.  Same for Germany, where there’s no equity culture and little of the economy is publicly listed.  No mention of Hong Kong or Shanghai or Japan or (most days) the UK.  Yes, the UK economy is smaller than Germany’s.  But London’s significance comes from its being the listing hub for many European-based multinationals.


My conclusion:  the new page has been put together by people who, whatever their tech smarts, have no clue at all about what an investor needs/wants.  Its overall tone seems to be to provide information that an investor will like to hear, based on browsing history.  Put a different way, the new page strives to turn users into the prototypical “dumb money.”  Actually, now that I’ve come to this realization, maybe the new page isn’t so counterproductive after all.  Just don’t use it.



security analysis in the 21st century: the former paradigm

One of my California brothers-in-law, a savvy investor and an Apple devotee, sent me an email the other day lamenting the parlous state of brokerage house analysis of AAPL.  He supplied this link from Apple Insider as evidence.

The article talks about Peter Misek, an analyst from Jefferies, who:

1.  had a price target of $900 for AAPL last year while the stock was going up and one of around $400 now that the stock has weakened

2.  made a series of (mostly negative) predictions about new products and current sales for AAPL, none of which have come true, and

3.  is blaming his misses on AAPL management failures and has used these occasions to downgrade the stock further.


In one sense, this is “normal” Wall Street behavior.   As an analyst trying to make a name for himself, Misek has been making out-of-consensus predictions.   He wants distinguish himself from the crowd and catch the attention of institutional clients who might direct trades (and therefore commissions) to his firm in exchange for access to his research.  In this, he’s following the time-honored dictum that customers will remember the home runs and quickly forget about the strike outs.

From what I’ve read on the internet–I haven’t seen Mr. Misek’s actual research, and have no desire to–what really sticks out in this case is the lack of skill he’s shown in the predictions he’s made.

Even that is not so surprising.

An illustration:

Early in my career (I’d been a buy-side oil industry analyst for maybe three years), I got a call to interview for a job as assistant to Charles Maxwell, then the dean of Wall Street sell-side oil analysts.  I went.

The interview was with the research director for Maxwell’s firm.  It was very short.

The hours were long.  The pay was poor.  I would be away from home visiting companies and clients about 60% of the time.  The payoff would come–if one did–three or four years hence.  Having made a reputation with clients, and with Charlie’s blessing, I’d be hired by a major brokerage firm as its oil analyst.  I’d do basically the same work as before but be paid the equivalent of several million dollars a year in today’s money.

The look of horror on my face at the prospect of a ton of boring travel–hadn’t they ever heard of the telephone?–was enough to tell both of us that I wasn’t the man for this job.

Two points:

–back in the day, securities analysts spent long apprenticeships learning their trade before they were allowed to take the reins as sell-side analysts covering major companies. and

–compensation was relatively high.

Both factors have changed a lot during the past decade.  Nevertheless,  I don’t think either the investing public or the companies being researched understand what’s happened.  Neither group appears to me to have adjusted to the new world we’re in.

More tomorrow.