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For years people have been investing in the markets on the advice of their broker or performing some biblical rituals or consulting their sooth sayers to pick the right investment which will make them rich.

As the legendary value investor and teacher Benjamin Graham said, "The problem dear investor, is not in our stars, and its not our stocks, its in you."

Making it big in the world of stocks is not about luck. With sound planning and developing a critical eye to guage any information on a stock or investment that comes by your way and not taking any information or market news on faith, you can easily save yourself from unsustainable optimism or unjustified pessism that forever grips the market.

By developing these skills you can take advantage of even the worst bear markets and  come on top a winner.

While there could be a series of articles on how to develop these skills, in this article I will focus on the business of equity research and how it has shaped investment decision making in India and across the world.

Imagine that you have a great relationship with a guy who has all the material resources in the world and can be of immense help to you in expanding your business, now, if you happen to evaluate that person on a scale, i'll wager your rating will most likely be extremely kind and approving of him.

That's the same problem plaguing the business of equity research.

If I play golf with the company's CEO and am invited to company luncheons, my bet is there is very little chance of me being objective when assessing the clients business. More so, If I expect to generate Investment banking business from these clients.

And even if there is no conflict of interest, as Aswath Damodaran - Professor of Finance at NYU stern said and I quote "Sell-side equity research analysts are the tools for momentum investing. They don't value stocks. They price them. While they sometimes act as cheerleaders for companies that their firms may have investment banking relationships with, their bigger problem is their herd mentality. Thus, even with no conflicts of interests, I would not attach much value to their recommendations."

So the next time you see a buy recommendation from the likes of CITI, Goldman Sachs or ICICI, stop for a moment and think of all possibilities.

The Solution:

If democracy is the answer to every problem humanity faces, I have no inhibitions to claim that the above problem too can be solved by the investing community as a whole. The point I am trying to make is that no two people think alike. And that's what we need here, we need multiple views on a single investment and that perhaps is the only way to negate the bias present in the existing business of equity research.

As an investor one should have the zeal and patience to learn about different opinions about a single investment opportunity from different sources so as to make an informed decision before investing.

I am a Chartered Accountant and a keen analyst with a passion for analyzing stocks and investments and the founder of


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