By Dominic Jones
FOR all of their prominence in the profession, it’s a remarkable thing that so little is known about how the esteemed IR Magazine Awards for investor relations are chosen.
Another commentator, fellow IR blogger Peter Schiefelbein, had some interesting things to say about them recently, but as I understand it the awards are chosen by buy- and sell-side analysts (and a few individual investors on occasion). They get called up out of the blue and asked to name their top picks.
That means the fate of aspiring award seekers is in the hands of a group that should have some idea of who is good or bad in IR circles.
Or do they? Have a clue, I mean. This story posted on IR Magazine’s website today makes me wonder. It is about Project Turquoise, an alternative trading system being put together by a group of brokerages to compete with the London Stock Exchange.
The story contains this nugget taken from IR magazine’s Investor Perception Study, UK 2007/2008:
Only 22 percent of respondents believe ATSs pose a threat, while the rest were unsure or felt unable to comment.
That means 78% of the respondents are clueless on this topic. Either the Chinese Wall between research and trading is remarkably solid in the UK, or the IR Magazine awards are based on the opinions of a bunch of ignoramuses.
UPDATE: Neil Stewart, executive editor of IR Magazine, has written a detailed response to my post on the Cross Border Group blog. Seems I misunderstood the sentence I quoted and only 38% are ignoramuses. See re: How informed are IR magazine award pickers?
I can give some insight here, but only on the private investor awards. For the past few years we have provided the research for the private awards using our Real World Investor service, where we have recruited some 750 odd retail investors, from high net worth down to Mom & Pop types.
Investors are given up to seven days to vote and we apply a series of weighting techniques to answers to bring in accurate results of what private investors believe works online for them.
Also having read the article you quote I saw something slightly different:
“40 percent of the 400 sell-side analysts, buy-side analysts and portfolio managers questioned in the survey are amenable to the ATS. ‘The London Stock Exchange (LSE) doesn’t have a God-given right to be the only one, so bring it on,’ commented one analyst. Only 22 percent of respondents believe ATSs pose a threat, while the remaining 38% were unsure or felt unable to comment.”
With it all being so new/up in the air at the moment ‘38% being unsure’ of what this will mean to the market I don’t think ranks them as ignoramuses! Especially in light of the fact that I fall into this category ;>)
Ian,
You didn’t read the story slightly differently. It is different. IR Magazine changed their story to make it clearer.
I quoted directly from the story as it appeared at the time — 6 days ago.
Also, I took their wording of “40 percent of the 400 sell-side analysts, buy-side analysts and portfolio managers questioned in the survey are amenable to the ATS” to be part of a different question. In other words, 60% are not amenable. Now, by “amenable” I took it mean they are willing to use it.
The next question, in my mind, was is the ATS a threat to the LSE? 22% said it was. The rest were unsure or felt unable to comment (my math put that at 78%). How you go from amenable to threat in a single question, I don’t know. They are two different concepts, surely? That’s how I understood it.
Now I see that IR Magazine has changed the story to make it clear that the 40% who are amenable and 22% who see it as a threat were answering the same question, and that 38% of respondents were unsure or felt unable to comment.
So all in all, not very clear, useful or meaningful — and easily misunderstood.