All of us who work as research analysts or stockbrokers have made recommendations we would rather not talk about. They come up in conversation at the worst moments, usually when you are sitting in an office in Mayfair explaining to a multimillionaire hedge fund manager exactly where he has got it all wrong. You annoy your host by pushing things too far or appearing a mite too self-satisfied, and he interrupts your stream of thought and inquires, languidly as a viper: “What about your Buy on Amalgamated Widgets?”
You know Amalgamated is down 16 per cent for the quarter to date; all you can do is play for time. Still, as you wait for the awkwardness to end, you fantasise about telling the truth.
It might not have been a straightforward error; perhaps this was a Brown-Nosed Buy. Career advancement does not come to people who make enemies by saying nasty things about the boss’s top client. Senior people can help you in all sorts of ways. Jack Grubman, a telecoms analyst at Citigroup’s Salomon Smith Barney unit, apparently once raised a rating to suit the bank’s chief executive, who he hoped would help get his children into an exclusive kindergarten. (Sandy Weill denied having done anything wrong.)