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

Washington Monthly, Oct, 1987 by John Rothchild

I made an appointment to see Ms. Temple, which was easy to get after I told a secretary that Mr. Deepak Raj had suggested that I call. Ms. Temple's office was on the usual upper floor of a Water Street high-rise, though she had no view of the harbor.

Ms. Temple is a heavy-set woman who wore pearls, and she looks a bit older than her two colleagues I'd visited. This was more or less-confirmed when she said she'd been in toiletries for 15 years. Ms. Temple also was less ebullient than the others, and I doubted she liked me any more than she liked Gillette.

It wasn't that she disliked Gillette per se, but that she thought the company would "lag the market' in earnings. "I wouldn't say "sell' here, but the earnings growth will be below average,' Ms. Temple said. "White Rain, though, has made some good inroads.' Her own earnings estimate of $5.80 a share was higher than Ms. Hall's estimate of $5.60, yet she was cool on the company while Ms. Hall was crazy about it. I found this perplexing.

I brought up Ms. Hall's opinion, but Ms. Temple wasn't really interested. She was more anxious to know what Mr. Raj had been saying. She also mentioned an Alice Beebe Longley at Donaldson, Lufkin, & Jenrette. That's where I headed next.

I checked in with Ms. Longley on the 31st floor. She was as winsome as Ms. Hall, and she had the appealing habit of taking her shoe off and wiggling her toe during the conversation. This put me at ease.

About herself, Ms. Longley mentioned she'd earned a Ph.D. in comparative literature. When I asked what this had to do with being an analyst, she laughed and said, "I used to take poems and analyze them to death.' She left a job in academia for the brokerage firm, enticed by the considerable increase in salary she got for analyzing cosmetics companies instead of Dylan Thomas.

About Gillette, Ms. Longley was halfway enthused, calling the stock a "moderate buy.' That put her somewhere between Ms. Temple and Ms. Hall, but at this point, I didn't really care. I was caught up in the analysts' intrigue, fascinated with their obvious interest in what their fellow analysts were saying. Now that I'd been dragged into it, I told Ms. Longley that I felt like a messenger on some diplomatic mission. I explained that I'd been moving from office to office, serving as an unpaid spy for Ms. Hall. Why, I wondered, were the analysts of Gillette so anxious to learn each others' opinions, and especially from me?

Ms. Longley kindly took the time to explain everything, beginning with what the analysts really do. They're not at all the statisticians and lonely investigators, poring over the company's books, that one might have supposed. And they don't spend all day writing reports. Meetings and phone calls take up most of their working hours. Ms. Longley said she'd just returned from a visit to Avon. "I get back, sit down, and call everybody I know who owns the stock to tell them what I found out. That takes half a day.' Meanwhile, her competitors like Mr. Raj or Ms. Temple may also have visited Avon, and they, too, are busily calling up big clients to tell what they've found out. The tricky part is that all the analysts have the same big clients. "I may call a client who just got off the phone with Diana Temple,' says Ms. Longley. "I'll hear from the client what Diana has been saying. He might say to me, "Your earnings estimate is low. Diana's projecting $5.80.''