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More reviews by Wayne E. Yang
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Wall Street Meat by Andy Kessler
ANDY KESSLER seems to be the perfect person to write the 1990s insider's account of Wall Street, since his career crossed the path of dotcom headliners such as research analysts Jack Grubman and Mary Meeker and investment banker Frank Quattrone.
Kessler's book WALL STREET MEAT, an entertaining insider's romp through the world of Wall Street research, follows his evolution on the Street. As a greenhorn analyst, he early learns the importance of stumping for votes in the prestigious Institutional Investor survey through trips nicknamed the "Ohio Death March", "Sherman's March to the Sea" and the "Metroliner to DC."
As a more polished and experienced analyst, he finds himself crossing paths with investment banker Frank Quattrone, who though uncannily smart about predicting whether a company is a "franchise player", also pushes through the wall that is supposed to separate Wall Street research and investment banking. It is the 1990s, and all anyone cares about is the frothy market. Momentum funds (or "momos") seek hot IPOs. Building a reputation is out. "The mold of a successful analyst was broken."
When Kessler decides to punch out from Wall Street and become a venture capitalist, undiscriminating Middle Eastern investor groups, looking to take advantage of the frothy market, each offer to write them $50 million checks. Yet, as he watches his former peers successfully play the new game and become celebrities, he admits that: "Watching [Grubman and Meeker] become the toast of the town was awkward."
Being an analyst becomes more about being an entertainer than an analyst. As more money falls on Wall Street, it encourages professionals to become more cavalier: Grubman says at one point. "What used to be a conflict is now a synergy."
Despite paying lip service to "integrity and reputation", Kessler never takes into account a sense of personal accountability, at least not when it comes to his friends. He excuses Grubman for simply falling to the analyst's "ax syndrome, recommending the shares of his companies all the way down," excusing it as a situation where it is impossible for an analyst to avoid cutting his own head off. "Malone was not doing Jack [Grubman] any favors by letting him invest in those deals. I kept this opinion to myself -- why offend an old friend?"
Likewise with Quattrone, Kessler says that "the structure nailed him." So bring in the regulators, right?
Inexplicably, however, Kessler says that if you try to legislate the problems away, "you will end up killing the whole system."
The barbs that Kessler hands out will generate chuckles, but Kessler also never really takes off the gloves. His insider's account of financial research in the '90s is often absorbing, but in the end, the WALL STREET MEAT pulls too many punches for it to attain the status of a Wall Street classic.
Wayne E. Yang
30/05/2004
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Wayne E. Yang is based in New York, where he lives with his wife and two children. His web site is www.wayneyang.com. |
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