At first, equity analysis was marketing. The job of a bank analyst was to encourage brokerage trading while helping to grease wheels in corporate advisory. The conventional way to work it was to recommend buying stocks. Then came the regulatory interventions — May Day, Spitzer, Volcker, Mifid II — and a crisis of purpose from which the industry never recovered.
As a result, when opening a sell-side note, it’s no longer a surprise to read sentences like this:
Aristotle’s Poetics, in our view, provides a useful framework for justifying quality premie and for how investment narratives can shake off contrary indicators when those indicators have a logical explanation for being transitory.
The quote above is from Jefferies’ chemicals sector team, led by analyst Laurence Alexander, and buried under the words is a reasonable point.