Success Strategies from Super Searchers on Wall Street By Amelia Kassel From MarketingBASE or

2 ©Amelia Kassel 707 Overview Super Searchers on Wall Street, one in a series Who are the Wall Street Super Searchers Book Themes Trends Research Topics Super Searcher Revelations, Tips, and Wisdom Web Sites and Databases

3 ©Amelia Kassel 707 Super Searchers – One in a Series Super Searchers on Wall Street is part of a book series edited by Reva Basch Each book contains interviews with 8-12 top online searchers in a specific discipline

4 ©Amelia Kassel 707 Super Searchers Series Questions bring out types of research questions asked, sources used and application of sources from information specialists in Business (Mary Ellen Bates) Law (T.R. Halvorson) Health and Medicine (Susan Detwiler) News (Paula Hane) Mergers and Acquisitions (Jan Tudor) Primary Research (Upcoming – Risa Sacks) Wall Street (Amelia Kassel)

5 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews All are experts in the use of financial information that contributes to the success of their organizations All use Commercial and specialty databases Web Resources CD-ROMs Print Sources

6 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews - Cont The Wall Street information and investment professionals hail from Investment banks Consulting firms Academia A Trade Publication A specialty vendor An Investigative Firm

7 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews - Cont Robert Magri Principal & Market Data Vendor Manager State Street Global Advisors, Boston Roberta Grant Business Librarian and Investigative Analyst Kroll Associates, Toronto Hodi Poorsoltan Information Manager, AKA Information Doctor General Motors Investment Management Corp., New York

8 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews - Cont Martha DiVittorio Manager of Information Services Oliver Wyman & Company, New York Chris Carabell Senior Vice President and Investment Manager Researcher Liberty Asset Management Company, Boston Gary Klein Individual Investor; Management and Economics Librarian Willamette University, Salem, Oregon

9 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews - Cont Nathan Rosen Vice President & Corporate Law Librarian Legal and Compliance Department Credit Suisse First Boston, New York Janet Hartmann Research Librarian and Registered Securities Representative William Blair & Co., Chicago

10 ©Amelia Kassel 707 Who are the Wall Street Super Searchers? Ten Interviews - Cont Tish Williams Senior Editor and Columnist Upside Magazine Richard Harrison Founder and Partner Global Securities Information, Inc. (LIVEDGAR) Washington, D.C.

11 ©Amelia Kassel 707 Book Themes Trends Databases Terminology, Concepts, Jargon Appendix Value Added Research Services Appendix with urls – also available free

12 ©Amelia Kassel 707 Macro Trends Affecting the Financials Services Industry Advent of the Web Thousands of financial industry professionals, end –users, with access to information tools on the desktop

13 ©Amelia Kassel 707 Financial Services Info Professionals Trends Recently, new libraries established or considered for the future IPs thriving and do not feel threatened by end-user searching Conduct in-depth research Provide value-added analysis or presentation

14 ©Amelia Kassel 707 Financial Services Info Professionals Trends New roles Training Intranet Development Negotiation and rollout of desktop systems Consulting

15 ©Amelia Kassel 707 Financial Services Info Professionals Trends Wall Street Needs Super Searchers: Nancy James A search engine doesn’t know the end user’s business, its goals and strategies, its markets, customers, and competitive threats, its language, concepts and rumors A search engine, even with the best relevancy ranking algorithms, doesn’t know what’s important and not important to each individual user

16 ©Amelia Kassel 707 Financial Services Info Professionals Trends Wall Street Needs Super Searchers: Nancy James A search engine doesn’t know how a user wants information packaged, what to highlight, what to leave out A search engine, even with the best language and domain experts behind its indexing scheme, is slow to respond to emerging trends

17 ©Amelia Kassel 707 Research Topics Company research, comps, valuation Detailed financial and statistical data Due diligence and securities risk and fraud Mergers and acquisitions Private placements and mezzanine structures Real estate investment trusts Industry research Subject research – many subjects

18 ©Amelia Kassel 707 Super Searcher Revelations Power tips and wisdom Strategies Techniques Financial databases and sites Scope, interfaces, pros and cons Why use one or another

19 ©Amelia Kassel 707 Super Searchers Revelations - Cont How the Series 7 exam can help a researcher Why everything worth searching for is found in pieces How to deliver structured data from multiple sources Why investment professionals pay for services How to cross-check data against multiple sources

20 ©Amelia Kassel 707 Power Tips and Wisdom Relationships Relationships with vendors are key Relationships with users/clients Anticipate needs Keep an ear to the ground Talk to project managers and ask for a description of the big picture Be aggressive and proactive

21 ©Amelia Kassel 707 Power Tips and Wisdom The Internet “I use the Internet as one of many tools or as a way to fill an information gap. It’s something that you have to do”

22 ©Amelia Kassel 707 Power Tips and Wisdom The Internet - Cont Few investment processes are solely dependent on the Internet Some Web-based versions of commercial products lack Complete data Functionality Analytical capabilities

23 ©Amelia Kassel 707 Power Tips and Wisdom The Internet - Cont Every client of mine that goes from stand- alone, to local network access, to the Web, to desktop access for everybody in the firm finds that twenty percent of their employees all of a sudden become "expert World Wide Web searchers.“ In fact, they’re not. They’re wasting time and not being productive

24 ©Amelia Kassel 707 Power Tips and Wisdom The Reference Interview What's most difficult before you even start a research job is to figure out the right question After that, ninety percent of the battle is done It saves time and money when users provide everything they already know

25 ©Amelia Kassel 707 Power Tips and Wisdom Research Techniques If a request is super-important because the information is going into a consultant's analysis and the numbers must be right, check two or three different sources Make phone calls to vendors to find out how the figures are derived

26 ©Amelia Kassel 707 Power Tips and Wisdom Research Techniques - Cont Given sufficient time and money, the broader the range of sources that can be used to confirm and verify the data, the better the end result You need to use all available tools because there is no one answer, no one source, or one right answer

27 ©Amelia Kassel 707 Power Tips and Wisdom Role of Information Professionals Despite  end-user desktop access, information specialists play the important role of information consultant They advise users about how to tap the best sources to meet selected requirements

28 ©Amelia Kassel 707 Power Tips and Wisdom Search Tips The SEC EDGAR search engine can be searched by Street address City Zip code

29 ©Amelia Kassel 707 Power Tips and Wisdom Search Tips By taking a company name through a wire service or local newspaper, you can track events and even clock them to the second You can analyze how good news or bad news affects the price of a stock the reaction time of competitors or how analysts reset their earnings projections according to news events

30 ©Amelia Kassel 707 Power Tips and Wisdom Search Tips It's less expensive to review the results in KWIC (key word in context) first and then request only items that seem to be relevant Several commercial databases have this capabilities Dialog LexisNexis Research Bank Web

31 ©Amelia Kassel 707 Power Tips and Wisdom Sources Major investment houses provide information and specialized reports for buy side subscribers We rely on specialized CD-ROM databases The World Bank provides information about environmentally-sound or public- spirited companies

32 ©Amelia Kassel 707 Power Tips and Wisdom Government Web Sites – Free and Save Time The Federal Reserve Web Site Research and Data, Working Papers, Section on Finance and Economics Discussion Series Topics covered, e.g., Why investors use credit derivatives to hedge their risk Historical bond yield spreads

33 ©Amelia Kassel 707 Power Tips and Wisdom Academic Web Sites - Free and Save Time Wharton a great site with academic papers on topics of interest to us

34 ©Amelia Kassel 707 Power Tips and Wisdom EDGAR Which EDGAR system to use may depend on output options Simple list of filings Summary of the 10Ks Visually-attractive presentation – actual annual report Complex research with power search strategies (LIVEDGAR)

35 ©Amelia Kassel 707 Power Tips and Wisdom EDGAR Don’t rely solely on EDGAR Non-EDGAR filings can be important Amendments to 10-Ks don’t have to be filed in EDGAR Some ownership filings are not required to be filed electronically Sometimes the last proxy before a merger is non-EDGAR

36 ©Amelia Kassel 707 Global Securities Information, Inc LIVEDGAR - Document retrieval for items not in EDGAR Provides specialized terminology for searching SEC filings Power searching capabilities Freetext Boolean Proximity Several databases available such as M&A

37 ©Amelia Kassel 707 Power Tips and Wisdom IPOs IPO prospectuses (S-1 Registrations) provide a lot of information about companies and industries Detailed financial data Competition Risks Marketing Strategies

38 ©Amelia Kassel 707 Power Tips and Wisdom IPOs Some private companies going public have filed and withdrawn because of market conditions However, S-1s were filed and are part of the public record available from EDGAR

39 ©Amelia Kassel 707 Power Tips and Wisdom Deliverables I sometimes spend as much time preparing the finished work as I spend finding the information to begin with I both crunch numbers and deliver end results as Word documents

40 ©Amelia Kassel 707 Power Tips and Wisdom Deliverables - Cont I often summarize from articles Deliverables vary When to spend a lot of time depends on the user’s needs I'll do whatever I can to make their job easier

41 ©Amelia Kassel 707 Power Tips and Wisdom Global Research Company disclosure for other countries doesn’t work the same as for the U.S For International Company Filings Click on “Guide to International Company Filings by Country, Agencies, and Stock Exchanges” Sedar – - Canadian Cos.

42 ©Amelia Kassel 707 Power Tips and Wisdom Global Research - Corporateinformation.com 300,000 worldwide company profiles U.S. public and private companies 15,000 reports from Worldscope (abbreviated format) Company Extensions Chart Foreign companies use GmbH (Germany), AG (Austria, Germany, Switzerland), CVA (Belgium), etc.

43 ©Amelia Kassel 707 Power Tips and Wisdom Current Information Daily newspapers on the Web are a tremendous source for important information

44 ©Amelia Kassel 707 Power Tips and Wisdom Acquisitions & Mergers In a merger, knowing all about the competitors that you are sitting across the table from makes it possible to get the deal you want SEC filings describe what your competitors have done in the past Historical company research

45 ©Amelia Kassel 707 Power Tips and Wisdom Screening Use a system for finding companies that match several criteria Variables may be: SIC code Sales size P/E ratio less A debt-to-equity ratio

46 ©Amelia Kassel 707 Screening Sources FactSet LIVEDGAR Mergerstat Securities Data (Thomson)

47 ©Amelia Kassel 707 FactSet: One-Stop Data Source with Current and Historical Data Compustat Fundamental financial information DRI (McGraw Hill) U.S. Regional Economics & Demographics Time Series Extel Company background, capital history, corporate actions and news on 18,000+ global companies Market Guide Fundamental financial information on over 10,500 publicly traded companies

48 ©Amelia Kassel 707 Fundamentals Financial statement data for a company Balance sheet Income statement Statement of cash flow o Financial ratios

49 ©Amelia Kassel 707 FactSet: One-Stop Data Source with Current and Historical Data - Cont OECD - Organisation for Economic Co- operation and Development A world-wide economic and social policy think-tank GDP, production, prices, and interest rates Value Line Worldscope

50 ©Amelia Kassel 707 Screening Sources Mergers and Acquisitions Securities Data - Other databases from Securities Data Equity and debt offerings Stock buybacks Bankruptcies Venture capital investments

51 ©Amelia Kassel 707 Screening Mergers and Acquisitions Mergerstat Large Database of M&A Deals Potential quality problem caused by timing of data collection The disclosure information is sometimes not filed in an obvious place because it's attached to something else later on Database information is initially entered from SEC filings or from press releases and news articles

52 ©Amelia Kassel 707 Selected Web Sites and Databases Barra.com Risk analysis statistics including Betas

53 ©Amelia Kassel 707 Selected Web Sites and Databases Bloomberg Known for fixed income information tools for Bond market Currency Money market Fairly good array of equity data

54 ©Amelia Kassel 707 Selected Web Sites and Databases Compustat (S&P) Consider No. 1 source for U.S. fundamental data Standardizes data from 10-Ks Creates a database with every company's income statement figured in the same way with exactly the same financial items The same information is required for all companies but the line items and accounting treatment may differ from 10-K to 10-K

55 ©Amelia Kassel 707 Selected Web Sites and Databases Datastream (Primark >Thomson) Similar to FactSet Several different data sources Most of the data sources are their own

56 ©Amelia Kassel 707 Selected Web Sites and Databases Datastream (Primark >Thomson -Cont International fundamental data Thousands of historical data sets on Inflation Interest rates Markets Stock exchanges Companies Countries

57 ©Amelia Kassel 707 Selected Web Sites and Databases Haver Analytics - Government and private sources for statistics Time series with historical information in spreadsheets Fast and easy to use on the Web Low Cost - $3 - $15 for data

58 ©Amelia Kassel 707 Mutual Funds Liberty Conducts CI Research Compares how their mutual funds are doing in relation to competitors Analyzes characteristics of their funds by looking at the universe of growth and income funds Have a couple of thousand direct competitors for just this one fund and look at averages

59 ©Amelia Kassel 707 Mutual Funds Resources Lipper Analytics - Two characterizations An index of the thirty largest growth and income funds Lipper Growth and Income Average: The average performance of all the funds

60 ©Amelia Kassel 707 Mutual Funds Other Sources and Web Sites Morningside Mutual Fund Café Financial Research Corporation Trends Statistics in the mutual fund industry

61 ©Amelia Kassel 707 Why do you use one or another of these systems? Content and functionality issues FactSet Better data quality and more databases Easiest-to-use interface Datastream International Data Economic Data

62 ©Amelia Kassel 707 Due Diligence Background Checks Private equity companies and IPO candidates are usually small and haven’t been in the public eye very much Little is known about individuals running small companies

63 ©Amelia Kassel 707 Due Diligence Background Checks - Cont Public records information is necessary before, during, and after companies are involved in transactions with each other The attorneys are looking for potential changes with regard to the economics of a deal and need information that will help them write a new clause

64 ©Amelia Kassel 707 Due Diligence Background Checks - Cont News Sources Public Records Require several sources to get the most coverage possible

65 ©Amelia Kassel 707 Public Records Information America Improved Interface Contains Bankruptcies Lawsuits Liens and judgments UCC (Uniform Commercial Code) filings Skip tracers –addresses of an individual Search by name or social security number

66 ©Amelia Kassel 707 Public Records Other Databases ChoicePoint (was CDB-Infotek) KnowX Web-based Low cost for occasional users From Information America

67 ©Amelia Kassel 707 Court Research Dockets Monitor and retrieve dockets for most federal district courts for finding cases involving Issues Clients Competitors Law firms Judges

68 ©Amelia Kassel 707 Court Research Sources for Dockets (Listing of Cases) Courtlink CourtExpress Pacer LexisNexis (Index to Dockets)

69 ©Amelia Kassel 707 Public Records LexisNexis UCC (Uniform Commercial Code INCORP Library Doing Business As for 50 States Mega - Case Law for the U.S. and States Can no search case law free on Lexisone

70 ©Amelia Kassel 707 Quality & Reliability Investment banks must have pristine data Use value added sources like Securities Data and Use Global Access for actual documents Corporate finance will look at several sources to compare figures

71 ©Amelia Kassel 707 Quality & Reliability Stock Web Sites Information is several steps away from primary data A site may have Hoover's Company Profiles and also use Media General for financials Data is taken from the SEC but the more times it’s processed the more chance there is for error and confusion

72 ©Amelia Kassel 707 Quality & Reliability Stock Web Sites - Cont You can’t be sure of the quality of the numbers and how current they are Are they adjusted everything for splits? Is the most current quarterly release incorporated “I tend to stick to sources such as FactSet. It clearly states what’s included and what’s adjusted.”

73 ©Amelia Kassel 707 Quality and Reliability Web Information is Suspect Make sure you are actually looking at the company’s Web site Verify Web site urls in another source, such as a reliable directories.

74 ©Amelia Kassel 707 Staying Current Bus-L Scout Report Search Engine Watch Newsletter

75 ©Amelia Kassel 707 Staying Current Periodicals Red Herring Upside Business 2.0 Barron’s Economist American Banker

76 ©Amelia Kassel 707 Summary Recognize that a wide variety of sources exist to assist in answering questions Never rely too heavily on any one source Use extreme care with any source before determining its value

77 ©Amelia Kassel 707 Summary - Cont Read as much and as widely as you can Talk to people There’s a great network of wonderful teachers and mentors out there waiting to be tapped

Success Strategies from Super Searchers on Wall Street By Amelia Kassel From MarketingBASE or