Whiners need to clarify what they’re whining about.  For example whining about proprietary trading and a firm’s research.



Suppose I am a proprietary trader and am long 1,000,000 shares of XYZ at $20 when my firm recommends the stock.



If the recommendation causes the stock to rally to $23 and I liquidated
my position into that rally how did my action harm the investors who
bought?



Is it not true that my overhanging supply tended to keep the price
lower, which benefited those who were buyng as a result of my firm’s
recommendation?

Perhaps you could explain to me how it's "whining" to point out that a firm should never put its own interests before its clients?

This is pretty much a no-brainer to me; if you tell clients to buy, no part of your firm should make money taking a position against your clients. In a larger view, that approach is little more than a grand pump and dump scheme.

This sort of "quit whining" excuse to cover for self dealing is just what puts the industry in a bad light with investors.

[quote=stanwbrown]

Perhaps you could explain to me how it’s
"whining" to point out that a firm should never put its own interests
before its clients?

This is pretty much a no-brainer to me; if you tell clients to buy, no part of your firm should make money taking a position against your clients. In a larger view, that approach is little more than a grand pump and dump scheme.

This sort of "quit whining" excuse to cover for self dealing is just what puts the industry in a bad light with investors.

[quote=joedabrkr]

firm trade for its’  own account?

For starters, it's risky.  Goldman is about the only one who has been able to do it successfully with any consistency. [/quote]

You know, when I heard Goldman's report that they thought oil could spike to $105/barrel, I got pissed as hell.  That bullsh*t instantly translates to higher prices at the pump, and detrimental effects to the American economy. 

Oh yeah, I hear Goldman is a big player in energy.  Yup, one of the tops in energy derivatives...

Nah, they wouldn't issue a bogus report to make some quick trading profits, would they?

They wouldn't recommend clients buy stocks in companies they make markets in either, would they?

[quote=inquisitive]

[quote=joedabrkr]

firm trade for its’  own account?

For starters, it's risky.  Goldman is about the only one who has been able to do it successfully with any consistency. [/quote]

You know, when I heard Goldman's report that they thought oil could spike to $105/barrel, I got pissed as hell.  That bullsh*t instantly translates to higher prices at the pump, and detrimental effects to the American economy. 

Oh yeah, I hear Goldman is a big player in energy.  Yup, one of the tops in energy derivatives...

Nah, they wouldn't issue a bogus report to make some quick trading profits, would they?

They wouldn't recommend clients buy stocks in companies they make markets in either, would they?

If we just take the trouble to read the Research Reports A thru Z, that brilliant analysts like Henry Blodget and Jack Grubman prepare, our clients and us will make a ton of money.

RightAway just admit it, Management’s and Investment Banking’s misdeeds have made Investors distrustful of Wall St. more than ever. This has hurt a lot of hardworking and competent brokers at the wirehouses.

It will take a while to earn Main St.'s trust again.

[quote=Put Trader] [quote=stanwbrown]

Perhaps you could explain to me how it's "whining" to point out that a firm should never put its own interests before its clients?

This is pretty much a no-brainer to me; if you tell clients to buy, no part of your firm should make money taking a position against your clients. In a larger view, that approach is little more than a grand pump and dump scheme.

This sort of "quit whining" excuse to cover for self dealing is just what puts the industry in a bad light with investors.

[/quote]

I'm not the fool who declared that filling a client's buy order is taking a position opposite to the client.

That idiotic logic can extend to every transaction in the street since by definition a buyer and a seller are on opposite sides of each trade.

Tell me, how does a customer lose if they buy a stock based on a firm's recommendation and the firm that made the recommendation sells the shares to the client.  How does the client lose?
[/quote]

Thank you Stan.  Couldn't have said it much better myself.

Put Trader, I like how you resort to terms like 'idiotic' and 'whining' when someone dares make a cogent argument that does not disagree with your world view.

If the position trader made the purchase of the stock because he had any advance knowledge of the research comment that moved the stock, or if he got the stock at a lower price and then sold it to the client at a higher price later that trading day because he was able to obtain the research more quickly and buy before the clients made their purchase, I would suggest it is an obvious conflict of interest.

If you dont' see that, Put Trader, you just don't get it on this issue.  Sadly, our industry is struggling with regaining the trust of the public because of too many folks who think like you do.

No offense intended, but it's merely my strong opinion. 

[quote=rightway] [quote=inquisitive] [quote=joedabrkr]

firm trade for its'  own account?

For starters, it's risky.  Goldman is about the only one who has been able to do it successfully with any consistency. [/quote]

You know, when I heard Goldman's report that they thought oil could spike to $105/barrel, I got pissed as hell.  That bullsh*t instantly translates to higher prices at the pump, and detrimental effects to the American economy. 

Oh yeah, I hear Goldman is a big player in energy.  Yup, one of the tops in energy derivatives...

Nah, they wouldn't issue a bogus report to make some quick trading profits, would they?

They wouldn't recommend clients buy stocks in companies they make markets in either, would they?

[/quote]

Goldman, Merrill, and the world for that matter has one purpose- to make our lives miserable.  Is that the case?  I could provide a pile of research reports from these two firms that DECREASED estimates, LOWERED expectations, and did everything to forwarn investors and advisors of possible dangers in the short run....but that doesn't fire you up so it would fall on deaf ears.  Your like the USA Today- you focus on bad news.  There is a lot of good things happening in the world of research, but you have to read the reports....the whole report...not just the Buy/Sell Hold on the front.  You don't get it, and you probably never will. 
[/quote]

You are so correct on that count, righty.  It consistently amazes me how many so-called professionals have no idea how to properly use research.  If you don't want to take the time to do it right, just stick with mutual funds!

[quote=inquisitive] [quote=joedabrkr]

firm trade for its'  own account?

For starters, it's risky.  Goldman is about the only one who has been able to do it successfully with any consistency. [/quote]

You know, when I heard Goldman's report that they thought oil could spike to $105/barrel, I got pissed as hell.  That bullsh*t instantly translates to higher prices at the pump, and detrimental effects to the American economy. 

Oh yeah, I hear Goldman is a big player in energy.  Yup, one of the tops in energy derivatives...

Nah, they wouldn't issue a bogus report to make some quick trading profits, would they?

They wouldn't recommend clients buy stocks in companies they make markets in either, would they?

[/quote]

You know....it may have resulted in higher prices at the pump but not for the barrel.  I remember hearing the news that morning, and thought "Hmmmm....Goldman's making an outrageous prediction like this....good sign this market has just about hit the top."  I sold my last oil service position out shortly thereafter, and it's about 5% lower already as of Friday's close.  Oil, meanwhile, is down about 10% since Goldman made their bold prediction.

Instead of getting angry, question what you see and think critically, mi amigo.

[quote=Put Trader] [quote=stanwbrown]

Perhaps you could explain to me how it's "whining" to point out that a firm should never put its own interests before its clients?

This is pretty much a no-brainer to me; if you tell clients to buy, no part of your firm should make money taking a position against your clients. In a larger view, that approach is little more than a grand pump and dump scheme.

This sort of "quit whining" excuse to cover for self dealing is just what puts the industry in a bad light with investors.

[/quote]

I'm not the fool who declared that filling a client's buy order is taking a position opposite to the client.

That idiotic logic can extend to every transaction in the street since by definition a buyer and a seller are on opposite sides of each trade.

Tell me, how does a customer lose if they buy a stock based on a firm's recommendation and the firm that made the recommendation sells the shares to the client.  How does the client lose?
[/quote]

1) I never "declared" that filling  a client's order was taking a position against the client. So long as you're filling the order from the open market, there's nothing wrong. OTOH, shorting a position the firm has a "buy" on, to fill an order OR selling out of inventory IS taking a position against a client you HAD recommended a "buy" to. There should be no reason to fill from inventory OR short to cover an order if we're talking about a reasonable float you you have recommended a "buy".

2) Every transaction does have a buyer and a seller, however, the firm shouldn't be the seller if they've recommended a "buy". They simply need to fill from the open market. I don't see why this is so hard for you to understand.

3) How does the client "lose"? They lose over the long run if they're dealing with a firm that puts its own profit before their client's interests.

Hello, thanks for your post. Your post is very informative and insightful. I was browsing the blogs because I am also trying to decide whether to go for the Financial Advisor in Training position with Wachovia or look at the FA training program with Merrill Lynch.  I was told by a friend who is an FA with JP Morgan Chase that bank is the way to go. But I from what some of the blogs are stating here is that Wachovia Securities is NOT always housed in a bank?  If this is the case, I much rather choose Merrill over Wachvia Securities FA position… If you have any additional information, please share them!