A Study in Research and Investment Firms

by David Jenyns on August 25, 2008

Research and research methods are controversial topics because of their very nature. A representative research department generally consists of a group of senior security examiners, assisted by juniors, statistical aides, and a librarian.

The adequate research department should center about a library that contains annual reports of leading companies, listing applications, prospectuses, and government publications, as well as the financial manuals. Depending on the size of the research staff, the examiners cover a number of industries. If a large investment is maintained in oil stocks, a member of the staff probably will specialize in the oil industry. Investment companies supplement the usual sources of information by having the members of the research staff visit companies periodically to make field reports and call on government agencies (in the case of regulated industries).

Research departments therefore provide a much-needed service to investment companies — an outside eye that can bring sober analysis to an often overindulgent business.

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