The stock analysts; the Wall Streeters who tell you when and what to buy and sell

Washington Monthly, Oct, 1987 by John Rothchild

Ms. Hall is as charming as she is attractive. She said she'd been an analyst for only two-and-a-half years and worked as an editor at Harper's Bazaar before that. It was comforting to hear her say that being a securities analyst is a lot like being a journalist. Like a journalist, she works long hours, 10 to 14 a day. She has a journalist's beat, cosmetics. She writes "stories' on the dozen or so companies she follows. Less like a journalist, in my experience, was that her base salary fell somewhere between $125,000 and $200,000 a year, plus generous bonuses if her stories turned out to be true.

When it came to Gillette, Ms. Hall congratulated me on a wise choice. Though she might have preferred Avon herself, she was certain that Gillette wouldn't disappoint its shareholders. "We've liked the stock since it was $50,' she said, "and we still like it now.' She explained that Prudential-Bache had a rating system from 1 to 5, with 1 for "aggressive purchase,' 2 for "accumulate,' 3 for "average performer,' 4 for "swap,' and 5 for "sell.' Each stock was assigned two numbers, the first for its near-term prospects, and the second for its long-term prospects. Avon was rated a 1-1, but Gillette was close behind at 2-2.

Ms. Hall went on to explain that last year's Gillette story was international earnings boosted by the falling dollar, while this year's story would be domestic profits boosted by market share gains in blades and toiletries, especially if people liked the new brown razors. She mentioned new Dry Idea deodorant products and Brush Plus makeup as big money-makers, said there'd be solid sales gains in the old razors, and predicted that White Rain shampoo, conditioner, and mousse would make a comeback.

Though Ms. Hall made a very convincing case for Gillette, I thought it wouldn't hurt to get a second opinion. I mentioned this as tactfully as I could, and she kindly gave me the names of other analysts who followed the stock. In fact, she seemed as anxious as I was to find out what these other analysts were saying. "Let me know if you hear anything interesting,' she said. "You can call me back any time.'

Wiggling the toe

The first name on Ms. Hall's list was Deepak Raj of Merrill Lynch, whom I contacted immediately. After I mentioned that I'd visited Ms. Hall, he invited me down to Merrill Lynch head-quarters, which is more or less the same setup but without the antique furniture.

As you might have guessed, Mr. Raj is of Indian descent. He was much too agitated for a prolonged, idle conversation. Perhaps if I'd bought my 53 shares through him, he might have had more time.

As to the future prospects of Gillette, Mr. Raj was cautious but optimistic. He had no free samples in his office, and said he hadn't bothered to try the new brown razor on himself.

Perhaps I shouldn't have mentioned that Ms. Hall was anxious to know what Mr. Raj was thinking, but I did. He didn't ask me what Ms. Hall thought. He was more interested in what Diana Temple thought, and wondered if I'd been to see her over at Salomon Brothers.