Typical Day
Analysa (named after her grandmother) is a sellside analyst. She works for SilverSlacks Partners, which is a gargantuan investment bank with twenty-eight divisions and lots and lots of brokers. These people have phones growing out of their ears and they "sell research" to mostly institutional buyers like mutual funds.
They use Analysa's research as a kind of "barter tool" in order to get the funds to trade with them—that is, "We at SS Partners will give you a good stock idea based on Analysa's work and in return you buy those 100 million shares through us. We'll charge you a pretty penny per share and everyone's happy." (As long as Analysa's right.)
Today she is visiting California, so she's up at 4:00AM, which is 7:00AM at her home office in New York. She has to sit in on the company call each day and give her seven-minute spiel on her media stocks. Today is all about a meeting with the CFO of Disney. She's been negative on the stock, doesn't like the lack of growth in the theme parks, and is nervous about commercial skipping on TiVo-like devices for their core cable property, ESPN.
The CFO is hoping to convince her that she's wrong—he knows that if she upgrades the stock, it'll go up a buck or two and that's a good thing for DIS shareholders.
They meet at 6:45AM California time and bounce back and forth covering forty-three different financial metrics that Analysa cares about. After twenty minutes, the CFO realizes Analysa will be hard to sway and he stops being engaged in the meeting, which further alienates Analysa as she begins to wonder what her write-up will be in describing this meeting to her clients.
After her ninety-minute breakfast, which seems like only seven hours, she returns to her computer at the Los Angeles branch of SS Partners, and compares her estimates of the next quarter, next year, next three years for revenues and earnings with her new take on things, given the input of the Disney CFO.
She makes adjustments. Theme parks will be five percent better; the new movie slate looks awful—it'll be twenty percent worse—the new TV series look spot on, no changes. Something like that, anyway. The process takes her and her minions two hours to complete.
Ahhh…wise minions, eh?
The new earnings number then suggests Disney will earn $2.15 next year instead of $2.10. Slightly positive bias. But even slightly positive is better than slightly negative. (If you're not convinced, try getting some slightly negative news from your doctor and call us in the morning.)
Analysa wanders down to her economics department, which proceeds to spin a tail of woe and doom about the world coming to an end financially and that they expect GDP to be down two percent next year instead of flat like the rest of Wall Street is expecting. Analysa believes that the CFO of Disney has no clue about the headwinds he is facing in this brutal economy and thinks that his estimates are optimistic.
So the $2.15, based on his micro view of his own world, will really be more like $2.00 next year in Disney earnings. And it's likely that the P/E (hm... not "Physical Education"—good try, though) multiples of these names contract if in fact the world is in such bad shape. Maybe she downgrades the stock further.
It's noon, California time, and she has thirty-nine missed phone calls, all marked "urgent." She returns the calls from employees of SS first. Then her best clients (i.e. those who give the most commission). Then...everyone else.
About two hours later, after lots of ninety-eight-second calls with her secretary madly dialing and then getting the callers to hold a few minutes, she's done. It's after 2:00PM, California time, and the markets have closed. The few companies who were to report, reported. Lots of yawns. Nothing urgent to be done on her end here.
Time for a long run. It's been a frustrating day. The stocks she liked didn't move. The ones she didn't, didn't move. Lots of "eh."
She makes about a million bucks a year for doing this job, so technically, today she earned about $3,000. That was about $300 an hour thus far for the ten that she worked. She asks herself if it was all worth it. She feels like she'll end up unmarried, unmothering, unloved.
She heads back to a super-nice hotel, receives a friendly greeting from the doorman, and logs on to JDate. There's always hope.