| Eliot Spitzer |
New York state attorney general Eliot Spitzer braved the wrath of sell-side analysts in person at Institutional Investor's equity research awards dinner last month. The self-appointed protector of retail investors was the guest speaker. He didn't pull his punches. He was glad to have been invited, he said, because "I really wanted to put faces to emails".
It did, at least, get a laugh. He then told his audience that "banks have been using the II awards as a false proxy for stock-picking prowess" when marketing their services to retail investors, yet virtually none of them were good stock pickers.
There were stony faces, a few groans, and some hissy fits. One winner stormed out, registering her protest by repeatedly bashing the release bar on the door until one of the event organizers stopped her.
II editor Mike Carroll's response was that in the 1990s people would use internet chat rooms or cab drivers' advice to pick stocks. He offered to take Spitzer to his childhood neighbourhood and buy him lunch if he found anyone "who bought a stock based on the recommendation of an II-ranked analyst".