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time

The analyst and his time challenge

Jun 2010/in /by

Guest post: Michael Prospero, Director of Research at FirstRain

As an analyst, one of the things I struggled with was the vast amount of information coming at me each day. A large part of my job was to read anything from or about my companies, competitor companies, industry bellwethers, thought leaders and of course the overall economy.

I set up Google alerts, but depending on the companies/stocks I entered I got a lot of junk both old and irrelevant. Also, there still isn’t a way to set up the types of sources you would like to read (e.g., no press releases or wire news) — the number of sources alerts covered is relatively small. The stated information from Google is that it watches more than 4,500 English-language news sites. and the number of alerts can become annoying if you have large portfolios of companies you’re tracking.

Additionally, I would have my stock ticker service up on my screen with the stock prices of my portfolios and this would provide an icon if there was news on a stock I had set up on the screen. A large part of my day was spent reading financial publications, checking news from the alerts on my companies, talking to customers and companies. When I had time in between those tasks, I spent my time working investment ideas.

As you read, you come up with ideas (idea generation), which leads you to search for other stories to either support or invalidate your theory. To find those stories, you would of course use Google search. Obviously, Google is very good at finding content, but because it’s most every source on the internet, you have to really hunt for something interesting and timely.

Oftentimes, you will find an article that is exactly what you were looking for in your search only to realize that it’s from 2006. Google search is comprehensive, but it’s tedious and extremely time consuming to dig through the clutter of totally irrelevant as well as non-business relevant content.

It’s been nearly three years since I was an analyst now and the one thing that has drastically changed is the number of blogs (and overall number sources on the internet) and their authoritativeness. In the beginning, the number of blogs was sparse and at best the authors of them were questionable. Now, we have blogs from extremely knowledgeable, connected, intelligent people and micro-blogging (e.g., Twitter) is yet the next step in the evolution of news.

So this leads to why I am at FirstRain: I believe if a system could have gathered all of the news that was business relevant, categorize it by company and topically, and allow me to personalize its delivery along with other preferences, it would have helped my process enormously. I could have spent more time on the phone and more time working on idea generation. Time spent on new ideas rather than time spent covering your butt is the way to create alpha.

platform

Integrating FirstRain into RMS platforms

May 2009/in /by

The FirstRain application keeps growing in functionality and today we have announced yet another way you can get to it. We’ve announced our integration with RMS – research management systems.

Todays RMS platforms organize research for the user. Sorting their sell-side research, independent research, internal research etc. into a file folder type of application making it easy to find based on what document is about. Now our research can now be organized and retrieved in the same way.

We have announced our ability to integrate into any RMS platform today – and specifically partnerships with Code:Red and Wall Street On Demand. In both cases, our research results and reports are provided already automatically categorized (tagged) by both the companies they are about and the investment topics they’re about so they easily integrate into the user’s RMS workflow.

The approach we’ve taken is a little different in each case though – as a result of what workflow the end user wants.

In the case of Code:Red we provide an XML feed of our research but we have also integrated our user interface embedded into the Code:Red UI. This means a user can pull up windows into FirstRain – looking at company data, competitor data, management data etc. and they are linked to the companies or topics the user has up in Code:Red system. If the user updates the company in Code:Red, the FirstRain windows also update. All very efficient – and this is the way FirstRain is also integrated into the FactSet Marquee platform today.

In the case of Wall Street On Demand, we provide an XML feed of research results, again pre-tagged by company and topic, which is integrated straight into the end user’s platform so the results show up natively instead of in a FirstRain window. WSOD builds platforms for their client partners and our results are available to our mutual customers. This approach of taking the FirstRain results and using them natively within the end platform is similar to the way FirstRain results are integrated into the Capital IQ platform today.

Both workflows greatly increase the efficiency for the user if the user wants to use RMS as the primary way to organize and access research.

We did these integrations at the request of several end users. Many firms want RMS to work. They want help sorting through the firehose of research they see every day and having it automatically categorized so they can find it easily saves them time, no question. Many users use their email systems today – Outlook or Lotus Notes – and so we are very interested to get involved in helping users find a better way. These partnerships are an important step forward for us, our partners and our mutual customers.

vision

You could be missing a quarter of what you should see

Nov 2008/in /by

My team were prepping me for a talk I am giving at NYSSA next week, and gave me some great statistics on why it is now so important to incorporate the web into your research process. For anyone who needs to get up-to-date, relevant information on business topics, if you don’t have an application to make the web practical you’re missing significant information. In fact, based on our analysis of the web results database we run, 12% of the content is on alternative sources like blogs, trade journals, transcripts etc. but then, when you focus it on business topics and companies, clean it up, de-dupe it, age it (only look at new content) and remove irrelevant documents an astonishing 27% is from alternative sources.

That means if you don’t have an application like FirstRain, you are probably missing more than a quarter of the content that impacts your business. Wow.

12% of total web content is alternative

27% of relevant content is alternative
Tradition and culture

Web2.0 and tradition

Nov 2008/in /by

I sat in on a great panel at the Web 2.0 Summit yesterday. We had executives from the health care, legal and media spaces discussing The Challenges Faced by Traditional Industries Embracing a Web 2.0 World.

I discussed FirstRain’s perspective on what we’ve seen in the financial services world. In this world the challenge in adopting a Web 2.0 platform like ours — which we’re seeing big momentum on — is working past the strong cultural bias toward established, authoritative content providers to consider Web 2.0.

Our clients typically believe that the Wall Street Journal, Financial Times, New York Times and sell-side research will cover the majority of the qualitative information that they need to know every day. Our client is also typically risk averse about their research process. It’s worked for them in many cases for 20+ years and they don’t want to change. So it takes time and effort to get them to open up to the fact that there is relevant, original, useful, and unique alternative research coming out of user-generated sources like blogs.

I also talked about the level of junk on the web and how our system removes it through a series of processes, both human and automated. My fundamental belief is that the buyside demands very high quality and that is a key to our making our customers successful.

As a panel we also talked about what had surprised us selling Web2.0 services to our traditional customers and where we thought the world was going. I discussed both the level of service our customers require, and the coming era of transparency. Both mean that we need to have a very hands on support process for our customers so that their FirstRain usage is configured both to their topic needs, and that they don’t miss anything that impacts their investment strategy.

The other panelists were all interesting, but the one I found most interesting was the GM of a Thomson division called FindLaw.com. This is a service that helps consumers find lawyers, and the most challenging thing Chris Kibarian talked about was getting lawyers to go on line. Lawyers are an inherantly conservative group and often not very tech savvy so he was very amusing describing what they go through to bring up web sites for law firms. The consumer is much more online typically than the lawyer and they’ve been delighted to see the rapid adoption of services like video and social networking within their clients web sites.

All in all – a good experience.

High View

Where’s the edge?

Aug 2008/in /by

We’re in sales training all day today and Keith McCullough of Research Edge came to talk to the sales team about the “tectonic shift” that is happening in investment research today and why he loves our service.

He gave us two terrific concepts that apply to our role in the shift.

1. “the edge is in the question – what question you ask and when you ask it”. It’s no longer speed, it’s no longer whisper, it’s about having the rigorous research process that you ask the question at the right time. FirstRain in the process stimulates continuous, valuable questions.

2. “the internet is the disintermediator”. He thinks there is a generational change happening. Technology is dramatically changing the way people get information. Why did Obama beat the Clintons? (whatever your politics Obama took a new, tactical, technology driven approach). It’s Google vs. the ad agencies – the old style is “coming down” and whole industries are being rebuilt – and Wall St is one of them.

Very inspiring stuff for our sales people. Keith is one of the very high performers on the street – well known for his performance – so he has great credibility with my team. He told them they are selling a hot product, on the leading edge, creating a market as the industry goes through radical change – heady stuff.

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