The Sudarshan Chakra Blog has good analysis of Merrill Lynch’s new walled garden. Reuters reports that Merrill Lynch is tired of having its analyst reports borrowed by online sources and is taking aggressive steps to protect its research.
According to Merrill Lynch’s global research chief, Candace Browning, research opinions provided to Merrill Lynch clients often appear verbatim in online news outlets within 60 seconds. Browning writes in a letter to clients, “…Much like the music and film industries before us, Merrill Lynch Research is in the throes of being Napsterized…” (Obituaries for Sellside Research are Premature).
Like the Recording Industry, Merrill Lynch has already made good on its promise to protect its research, successfully sueing Theflyonthewall.com last year for plagiarizing research.
What This Means For Investors
The Sudarshan Chakra Blog sums it up well…
Sell side analysts are currently barred from having privileged access to executives and information. So there is no information that is available to Merrill analysts that is not available to other analysts and the general public. So the only “value added” part of a Merrill report is pretty much the analysts’ opinion and interpretation of data.
The Future of Free Research
Zach and I built ValueWiki on the assumption that the internet will give paid research a run for its money. Like Wikipedia versus Brittainica, I believe 10 amateur volunteers working in synergy are smarter and more productive than a single paid expert. Examples:
*The ValueWiki SSRX page was written the day the company IPO’d. ValueWiki had SSRX information up weeks before any other financial site.
Only time will tell if ValueWiki truly becomes the Wikipedia of investing. But I believe news like Merrill Lynch’s signal the death knell of paid sell-side research, and the emergence of freely available and high quality internet research.
If you believe investors should have completely free access to great research, login to ValueWiki. What have you got to lose, it’s free! Share your research and expertise with the world.