1. Sell Side Buy Side Up Side Down Side Learning to Speak Investment Management Joan Williams March 6, 2002

2. Sell Side Buy Side PART ONE

3. Industry Organization Sell SideBuy Side analyst

4. Industry Organization Sell SideBuy Side analyst Company Industry Economy Recommendations & Analysis Sell Side Company Technical Analysis & Investment Decision ==

5. The World of the Sell-Side Analyst

6. Sell Side: Major Players Investment Banks –CSFB, Morgan Stanley, Merril Lynch, JP Morgan, Bank of America, Deutsche Banc, Bear Stearns, CIBC –Company and Industry Reports Regional / Industry –Ex. – Simmons in Energy

7. Sell Side: Goals Produce and sell research “Call It” Reputation / Credibility –Go-to analyst –Expert status / air-time Funny Titles

8. Sell Side: Research Interfacing with Company Management –Conference Calls –Company –Conferences (ex.- Extreme Networks) –Robertson Stephens Technology Conference -- San Francisco, CA Wednesday, February 27, 2002 Time: 3:00 p.m. PT (6:00 p.m. ET) Presenter: Gordon Stitt, Chief Executive Officer –Merrill Lynch Global Communications Conference -- New York, NY Wednesday, March 13, 2002 Time: 12:00 p.m. PT (3:00 p.m. ET) Presenter: Gordon Stitt, Chief Executive Officer Economic and Industry Data Credit Ratings

9. Sell Side: Reports Company / Industry (Sector, SubSector, Commodity)/ Economy / Theory Report team Earnings models Supporting analysis Expectations –EPS and CFPS (First Call / consensus) Investment Recommendation

10. Sell Side: Clients Internal and External Buy Side –Investment Management Intermediaries –Investment banking analysts Chinese wall / conflict of interest Bias –“Buy doesn’t mean buy” –Dropping coverage

11. The World of the Buy-Side Analyst

12. Buy Side: Major Players Investment banks –Institutional and Private Wealth Mutual Funds Portfolio Managers –Institutional and Private Wealth

13. Buy-side: Sell-side relationships Buy-side pays for sell-side relationship Go-to people –Often share models or background information Daily conference calls Road shows (usually following report) Often internal (I-banks)

14. Buy-Side: Research Build own earnings models Utilize Conference Calls –Daily sell-side calls –Company earnings Company guidance –Conf. Calls and Road Shows Real-time market trends Technical analysis (shhhh….)

15. Buy Side: Flow of information Flow up to PM’s and Fund Managers –Sometimes same people Assigned to S&P sector and strategy group Internal meetings and reports

16. Buy Side: Brokers and traders Access and timing Two-way information flow

17. Buy Side: Performance Measures Fund & Portfolio marketing results Benchmarking

18. Up Side PART TWO Down Side