EVEN PLAYING FIELD?

A competitive environment in which we all use our best abilities to perform our jobs usually produces the most effective results.

Investors must understand that “Wall Street” is selling a product. That product is defined as research. The research reports are often prepared by young people recently out of school and generally with no industrial background. Over my years on “Wall Street”, I have always found that analysts are constantly changing.

In a recent research report a brokerage firm referred to sales information they had obtained from a service called SportScan. We checked and were told the service costs a minimum of $30,000 per year. This information was in no way available to the general public.

The SEC, over and over again, speaks of a “level playing field”. Clearly, those individuals/firms that possess this type of information have information not available to the public and are able to make investment decisions based upon this expensive subscription service.

I happen to not believe in the concept of level playing field – there’s no such thing. It’s about time investors knew that decisions are made in a competitive environment and that some people will always have more information than others.