Veteran banking analyst Richard Bove, a ubiquitous presence in the business press, insists that he hardly ever calls reporters except when he has “violent: disagreements with them. They call him so much, in fact, that he has drastically curtailed his television appearances because he wasn’t able to get his work done.
“It was getting to be a hassle,” says Bove in an interview, adding that he has turned down every request from CNBC and Bloomberg TV but one each. “I never call the media. They call me.”
Business Insider argued that the analyst had been muzzled by a new policy of his employer Rochdale Securities instituted this month, a notion he disputes. He needed to get off TV, where he has appeared 500 times, for practical reasons. For one thing, Bove says that clients got mad at his frequent video appearances because they felt he gave the media his insights — which they paid for — free. He now prefers mainly to work with print reporters, a group he largely likes.
Bove is one of an elite group of go-to analysts who journalists can count on for pithy commentary under tight deadlines. Many analysts and fund managers are either unable or unwilling to do it because of the time involved. Others flock to the press when they can to raise their profile. Bove, for his part, has mediocre ratings which he argues is a reflection of his firm’s small size rather than his performance as an analyst. For instance, in order to do well on the Institutional Investor rankings “you really need to have a much larger marketing force,” he says, adding that he last ranked on the list for 9 years in the 1980s. “My work is judged by how much money I bring in.”
Some analysts with great reputations in the media, such as Meredith Whitney, who is credited with being one of the first to see the coming financial crisis in 2007 and is now forecasting a wave a municipal defaults, also are not considered by Institutional Investor and Starmine, another rating service owned by Thomson Reuters, to be among the best in their field. Neither is Gene Munster of Pipper Jaffray, the often-quoted pundit on Apple Inc. (NASDAQ:AAPL), or banking analyst Mike Mayo of Caylon Securities, rival of Bove. Some analysts are quoted more often than they should be because they are accessible to the press, either because they are publicity hounds by nature or their firms force them to be that way. Reporters and producers also turn to analysts like them oftentimes out of habit or laziness.
Sadly, their mediocre performance may not matter. The media loves to write about colorful analysts such as Bove even if they think they are wrong. Consider Business Insider’s commentary on the analyst:
If you’ve turned on CNBC or Bloomberg at any point in the last few years, you’ve no doubt seen bank analyst Richard X. Bove giving either a very bearish or very bullish comment on this or that bank.
His media-hungry style and seemingly schizo stance on some companies has invited a fair degree of mockery.
Or this 2009 comment on Mayo from 2009 in the Wall Street Journal:
Mayo’s downgrades are something of a Wall Street tradition. In 1999, when he was working for Credit Suisse First Boston, Mayo told investors to sell every bank stock they owned. The controversial call made Mayo unpopular, to say the least. A rival analyst jeered him as “Mayo-naise” and brokers posted his face on dartboards.
Whitney has taken such flack for her bearish call on municipal bonds that CNBC highlighted when she “got dissed again” by a muni bond manager on the air. In October, Bloomberg pointed out that “about two-thirds of her picks have fared worse than market indexes.”
For his part, Munster’s bullishness on Apple is legendary. In April, he caused a panic when his estimates for the first day of iPad sales were twice as large as what Apple actually sold. He apparently misread a press release and was credited with acknowledging his blunder. Even so, Munster remains the definitive outside Apple expert to many in the press though the Apple press blasts him from time to time. His track record does not seem to warrant that type of attention.
These four are hardly the only analysts who are magnets for publicity on Wall Street but the media’s fascination with them is particularly noteworthy. It seems as though their every utterance is gobbled up by the Wall Street Journal, CNBC, Bloomberg News and the financial blogosphere. Investors should ask themselves whether they are being quoted because they have something interesting to say or whether it’s because of the controversy they generate.
Below is our pundit score card:
Richard X. Bove (Rochdale Securities) :Institutional Investor: Not Rated 2010, StarMine (2010): Recommendations (3/5)-Estimates (3/5)
Meredith Whitney (Meredith Whitney Advisory Group LLC): Institutional Investor: Not Rated 2010, Starmine (2010): Recommendations (1/5)-Estimates (2/5)
Gene Munster (Piper Jaffray): Institutional Investor: Not Rated 2010, Starmine (2010): Recommendations (3/5)-Estimates (2/5)
Mike Mayo (Caylon Securities): Institutional Investor: Not Rated 2010, Starmine (2010): Recommendations (1/5)-Estimates (3/5)
Jonathan Berr
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