Book Review: Full of Bull - Do What Wall Street Does, Not What it Says by Stephen McClellan
Stephen T. McClellan is a seasoned securities analyst who has more than 32 years experience with several different well known investment firms. In his book Full of Bull- Do What Wall Street Does, Not What It Says, To Make Money in the Market , he gives readers a insider's look into the world of securities analysts and attempts to help individual investors in decoding the cryptic and contradictory views on stocks put out by Wall Street.
I found some interesting points in this book. One main point is that ratings on securities put out by securities research companies are often out of date, and somewhat bent by politics because security analysts want to keep good relations with companies in order to get information. So a "buy" rating might mean a "sell", and a "hold" rating might really mean a buy. There is also a very enlightening history of the field of security analysis and what the effect security analysts had on the market. Since McClellan covered technology, his stories about stocks are focused on the technology sector, and since I work in software I found this to be quite educational.
For investors, most of the wisdom is in Chapter 4 titled "Evaluating Companies as Investment Candidates". I think a lot of the points in this chapter are common sense and I have heard them before, and I think it is geared for those who want to keep a long term investment rather than speculate short term. It is advice that would be easily embraced by investors who invest in the fundamentals of a company.
Personally, I think the biggest problem with this book is that it is more focused on what securities analysts do and not what investors should do. The daily workings of securities analyst is quite interesting if you want to get into that field, but I found it to be somewhat useless information as an investor. For example, the author often recounts stories of the executives he has met and the way these executives acted in front of him. He then listed a bunch of traits he did not like when he met an executive. All of those points may be valid, but in reality, very few individual investors get that kind of exposure to head honchos at public listed companies.
Another thing I did not like about the book is that the author liked to flaunt his achievements and his awesome benefits from his jobs. One mention of a golf trip was fine, but there were stories upon stories about his marathons, cruises, and dinners with Ross Perot. Sometimes these stories were awkwardly inserted and I am not sure how they would help me as an investor. Additionally, the author seemed quite nostalgic throughout the book as he recounted the better days when security analysts actually did research rather than pure marketing.
In summary, I thought Full of Bull was a well written and intelligent book, but it does not offer very much to a beginner investor. Those who are more involved with Wall Street may identify with the events recounted in the book a bit more and may enjoy it more. I like that this retired analyst pointed out all the things he thinks are wrong with the way Wall Street operates now, and I definitely learned a few things. So I highly recommend this book to those who are interested in security analysis, and the history of the stock market in the past few decades.