Equity analysts have been shipping out from sell side firms on Wall Street and establishing their own independent analysis shops – in droves - according to “Research Renegades” in the November 2009 Bloomberg Markets magazine.

The ongoing transformation of the sell side – through the financial crisis, the bear market and assorted tribulations still taking shape in Washington – is a big change that calls for investor relations professionals to flex with the times.

If we are to connect with our companies’ audiences in the investment markets, we must pay close attention to boutiques and independent analysis firms, as well as the old-line brokerage houses that have traditionally provided research coverage.

Bloomberg writer Edward Robinson quantifies the shift:

The number of independent research firms in the U.S. has soared to 2,667 from 1,012 in 2006, according to Integrity Research Associates LLC., a New York-based consulting firm.

The article notes that traditional investment banks (mostly) aren’t going away. Their underwriting and ability to allocate securities offerings undergird relationships with institutional clients. The buy side sends 70% of commission dollars to giant firms, and only 3% to the independents, according to Bloomberg.

“There is a symbiotic relationship between the bulge-bracket bank and the typical institutional investor, and I can’t see that being displaced,” [Jay Bennett, a consultant with Greenwich Associates] says.

Yet many sell side analysts are departing, starting up their own shops or joining small firms. The article focuses on analysts leaving to avoid conflicts of interest at investment banks, but the broader Wall Street meltdown and dearth of offerings in the past couple of years must also be contributing to the exodus. Economics trump philosophical purity in most job moves on Wall Street (or elsewhere).

Point is, we must follow the analysts, learning about their world as they study ours. Our contacts must extend to the independent firms – without giving up on the big guys. And most IROs probably should focus a lion’s share of attention directly on the buy side. (See earlier post on declining sell side coverage.)

What’s your experience with independents? Any ideas to share with IR colleagues?

By Thao Anh Tran

Networking with peers at an academic conference in Seoul, South Korea. Photo: Thao Anh Tran

Between meeting and discussing with students across the globe my shared interest in East Asian affairs and seeing North Korea from the Peace Observatory in the DMZ, this past week served as an incredible learning opportunity for me.

As a recent graduate of the Elliott School of International Affairs, I am particularly grateful for the financial support I received from the Elliott School Undergraduate Scholars Program. The funding enabled me to participate as a delegate in the Security workshop at the 2009 Harvard Project for Asian and International Relations (HPAIR) Academic Conference, which was held in Seoul from August 14th to August 17th. Every year HPAIR brings together hundreds of the brightest minds, both students and experts in the field of international relations for discussion on economic, political, and social issues pertinent to the East Asia-Pacific region.

Originally I was extremely worried that I would appear out of place when engaging in discussion of complex issues with future leaders in the field of international relations. Fortunately, my mind was immediately put to ease when I realized my familiarity with the topics of discussion. I was first introduced to issues such as U.S. policy in East Asia, Inter-Korean relations, the rise of China, Japan’s Asia policy, ASEAN, and ‘comfort women’ in Professor Mochizuki’s PSC 175 International Relations of East Asia course during my junior year. The knowledge I gained from that course gave me the confidence to debate with the other participants on ways to resolve the history problem that plagues relations between the countries in Northeast Asia.

My participation in HPAIR not only helped me gain a more in-depth understanding of issues of major concern to East Asian countries, but also enabled me to engage in forthright discussions with fellow participants about the future of the Asia-Pacific region. Additionally, from my field trip to major cultural attractions in Seoul and interaction with the Korean delegation, I learned a great deal about the Korean culture and picked up a few useful Korean phrases. I also gained numerous friendships with participants from all across the globe. From now on, whenever I travel to countries as far as Indonesia, Thailand, Germany, and Israel, I know I can count on these friends to help me navigate their countries.

Taking in the sites of Seoul, South Korea with new friends. Photo: Thao Anh Tran

By the end of the conference, I could not help but felt great pride as an Elliott School alumna. The Elliott School’s reputation as a renowned institution of international affairs is indisputable and far-reaching. When fellow participants discovered I recently graduated from the Elliott School, I instantly became a ‘human attraction’ for those who plan to attend the Elliott School in the near future.

While I am saddened by the fact that I will not be able to continue to enroll in interesting East Asia-related courses at the Elliott School, I think current and prospective students can take comfort in the fact that their education at the Elliott School will give them the needed preparation and confidence to succeed in the field of international affairs.

Thao Anh is a recent graduate of the Elliott School of International Affairs, where she double majored in International Affairs (with concentrations in International Politics and Asia) and Asian Studies. In 2007, she studied abroad in Hangzhou and Beijing, China and is currently on a Fulbright grant in Yanji, China conducting research on the role of the ethnic Korean community in facilitating Sino-North Korean relations. Upon her return to the U.S., Thao Anh will pursue a Master’s degree in Public Policy at Harvard’s Kennedy School of Government.

According to urban dictionary a scraper is an old car ,usually a Buick, that has rims on it often being worth more than the car itself and so big that they scrape the body of the car as it drives. A scraper bike as you might have guessed is a bicycle that has been made to look like it has nice rims, and a fancy paint job. The primary purpose of these bikes appear to be to ride around and show off. The scraper bikes are taken seriously by some, but almost seem to be a parody of the culture that it is mimicking to others. This makes it hard to distinguish between the two.

Some of the scraper bikes have real paint jobs, and expensive rims, but the majority that I could find on the internet are made by wrapping spray painted aluminum foil or foil wrappers around the spokes giving the appearance of rims and spray painting the body of the bike usually to match the color of the wheels. Jacob Fenston of n.p.r. reported that this trend started in Oakland by a then 19 year old Tyrone Stevenson Jr. who couldn’t afford a scraper car and made due with what he had. Tyrone made a music video about his new creation and posted it to youtube, and as of writing has received more than 2.5 million views. Since then scraper bikes have shown up at the very least up and down the west coast, stretching as far north as Portland, OR and as far east as Albuquerque, NM. Check out the original video and some more pics below.

The Video that started it all:

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