Buy Side vs. Sell Side
By Ben Carlson at A Wealth of Common Sense
Excerpt:
“What is the reward of being right, benchmarked against the cost of being wrong?” – David Rosenberg
For a number of years David Rosenberg was one of the top dogs at one of the largest, most well-known firms on Wall Street. As he told Barry Ritholtz on a recent episode of Masters in Business, it wasn’t until he left that job that he realized how much he still had to learn:
When you’re the Chief Economist at Merrill Lynch you think you’re the starting pitcher for the New York Yankees. You have it all figured out. I realized when I got to Gluskin Sheff how much I didn’t know.
About six years ago Rosenberg made the transition from the sell side, at Merrill Lynch, to the buy side, at Gluskin Sheff. For the uninitiated, on Wall Street the sell side consists of those who produce research, forecasts and advice, but don’t manage client assets. It’s called the ‘sell side’ because they sell their research and ideas. On the other hand, the buy side consists of people who manage money — portfolio managers, hedge funds, RIAs, etc. The buy side uses those research reports and forecasts to make their investment decisions.
