Confessions of a Wall Street Analyst
by Dan Reingold

It’s a good bet that your broker doesn’t want you to read this book. It’s the kind of read, after all, that adds a little extra heartburn to many of your most acid-reflux-inducing anxieties about investing in the stock market: that you’re doomed to be left out of the loop, with no access to the wink-wink inside information that certain big players pass around like Cheez Doodles; that analysts, who are supposedly paid to tell you what’s really going on at a company, are in fact often pressured to crank out Potemkin-village happy talk; that the whole system can, at times, be as rigged and corrupt as a Russian riverboat casino. “Obviously when the nineties bubble burst, you had this tremendous political, cultural war against Wall Street—‘You stole our money!’ And it turns out, some did. Main Street got screwed by Wall Street, and was also harmed significantly by the neglect of the SEC and the government,” says Reingold, who spent 14 years at Morgan Stanley, Merrill Lynch, and Credit Suisse First Boston. “I show instances where $3 billion, $7 billion, $14 billion of value has in effect moved from those out-of-the-know to those in-the-know. And the number of people in-the-know is like one-one-millionth of the people that are out-of-the-know, which is the rest of us.” He goes so far as to suggest that a young guy with mad money should be wary of investing in the stock market at all. “Only in a very diversified way,” Reingold says. “Index funds are my favorite thing to recommend, and my recommendation is to not try to pick stocks. Because when you try to pick a stock, you’re absorbing all the information you can, but you’re getting it late and you’re getting it incomplete compared to some other people who have a lot more money to play with. It’s this uneven and illegal information flow that taints the markets and makes it unfair for you, so why should you try to compete on that playing field?”

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