Confessions of a Wall Street Analyst

by Daniel Reingold, Jennifer Reingold

Here is the true story of a top Wall Street player's transformation from a straight-arrow believer to a jaded cynic, who reveals how Wall Street's insider game is really played. Dan Reingold was a top Wall Street analyst for fourteen years and Salomon Smith Barney analyst Jack Grubman's chief competitor in the red-hot sector of telecom. Reingold was part of the "Street" and believed in it. But in this action-packed, highly personal memoir written with accomplished Fast Company senior writer Jennifer Reingold the author describes how his enthusiasm gave way to disgust as he learned how deeply corrupted Wall Street and much of corporate America had become during the roaring stock market bubble of the 1990s. Confessions of a Wall Street Analyst provides a front-row seat at one of the most dramatic -- and ultimately tragic -- periods in financial history. Reingold recounts his introduction to the world of Wall Street leaks and secret deal-making; his experiences with corporate fraud; and Wall Street's alarming penchant for lavish spending and multimillion-dollar pay packages. Reingold spars with arch rival Grubman; fends off intense pressures from Wall Street bankers and corporate CEOs; and is wooed by Morgan Stanley's CEO, John Mack, and CSFB's über-banker Frank Quattrone. Reingold describes instances in which confidential deals are whispered days before their official announcement. He recalls the moment he learns that Bernie Ebbers's WorldCom was massively cooking its books. And he is shocked to have been an unwitting catalyst for a series of sexually explicit e-mails that would rock Wall Street; bring Jack Grubman to his knees; and contribute to the stepping aside of Grubman's boss, Citigroup CEO Sandy Weill. Some of Reingold's stories are outrageous, others hilarious, and many are simply absurd. But, together, they provide a sobering exposé of Wall a jungle of greed and ego, a place brimming with conflicts and inside information, and a business absurdly out of touch with the Main Street it claims to serve. He shows how government investigators, headlines notwithstanding, never got to the heart of the ethical and legal transgressions of the era. And how they completely overlooked Wall Street's pervasive use of inside information, leaving investors -- even sophisticated professionals -- cheated. The book ends with a series of important policy recommendations to clean up the investing business. In the tradition of Liar's Poker and Den of Thieves , Confessions of a Wall Street Analyst is a no-holds-barred insider's account that will open the eyes of every investor.

Genres: Finance, Nonfiction, Business, Economics, Biography, History, Memoir

368 pages, Hardcover

First published January 1, 2006

Reviews

[Topher · Rating 4 out of 5]

I remember reading Dan Reingold's opinions back in the 90s when it seemed like tech and telecom would never stop rising. After a few years, the fact that I no longer have stock options worth 100s of K isn't quite as painful, so I wanted to try to figure out what happened. I went looking for Blood On The Street (different author, same general topic) when I saw this autobiography. It made for some good reading.

More amusing to me though was how it all ended. In the last 20 or 30 pages of the book, the author questions why Elliot Spitzer stopped where he did in investigating the insider trading etc in telecom in the late 90s. After the whole hooker thing, I wonder now if that had anything to do with it.

I am now more convinced than ever that trying to pick and buy stocks is a losers game if you're not actively working on wall street. I'm still proud of my rating on the motley fool's caps competition though, where I bounce back and forth between being ranked in the 97th and 99th percentile.

I just hope my next job isn't chosen because of salary and stock options. I worry sometimes that I may give back in to that temptation and go live in a cubicle somewhere.

[M. Roberts · Rating 2 out of 5]

This story had great potential. With all of the drama around Wall Street's shenanigans over the past few years, the promise of an expose by a Wall Street analyst insider was intriguing. Unfortunately is is written... well...like a Wall Street analyst would write it.

The overall story is pretty good, but aside from the information being very dense and analytical, the author can't seem to help arguing his case for his own innocence in the book and taking every opportunity to point out how guilty those around him are. In the end, it read much more like an effort to absolve himself from wrongdoing than a confession.

I think that if he would have stuck to the story and resisted slipping into either analyst or defendant mode, this book would have been pretty good...not to mention about 150 pages shorter. Unfortunately that is not what he did, and as a result I was eagerly looking forward to the end...not to find out what finally happened, but just to be done with it.

[Vikram · Rating 4 out of 5]

A very interesting and gripping book on what goes on inside wall street, and why individual investors should stay the hell away from individual stock picking due to uneven flow of insider information among top executives on Wall Street. A must read for anyone interested in how the stock market really works. One can't help but wonder what illegal activies the author might have been involved in and not reported in the book. Probably due to the easy connection between Wall Street and corporate criminals that comes through so clearly in this book.

[Cihan Koseoglu · Rating 5 out of 5]

Best book I've read this year. I think the way Reingold describe the events is pretty exciting, and gives a good insider look into the investment banking industry. I was always interested in what happened to WorldCom and this was a good story.

[Lee Wei Wei · Rating 3 out of 5]

For starters,it can give you a true view of investment banks with their dirty dealings. Although many claimed that the current market is a semi efficient one,I did believe that there is a hint of inside information for all transactions. Dan Reingold has showed us the importance of sticking to the conventional and safe method while working in an investment bank,and that insider trading will cause the downfall of an organisation,no matter how rigid and strong the organisation’s foundation is.

[Dan · Rating 3 out of 5]

Fascinating for the first few chapters and then gets bogged down in telecom industry minutia. The main take-away from the book: the big players on Wall Street have access to much better information than the individual investor and trying to compete with them is suicidal.

[Steve Percoco · Rating 5 out of 5]

I bought this book nearly 15 years ago, soon after it first came out, but did not manage to read it cover-to-cover until now. As an independent security analyst who followed a few of the companies that are covered in detail in the book, I can relate personally to the practices described by Mr. Reingold and also the boom and bust telecommunications market that ran from the late 1990s to early 2000s. Mr. Reingold was a central player in drama, however, and he (and his co-author) vividly describe the dealings and practices of these firms with their Wall St. financiers during this tumultuous period. The book chronicles an important period in Wall St. history that helped usher in the Dodd-Frank reforms and New York state's investigation of research practices and the state's settlement with the major Wall St. banks. Although the telecom industry was unusual in its sharp ride up and subsequent crash, many of the day-to-day aspects of an equity analyst's job and the conflicts that arise are covered quite thoroughly in the book. It should therefore be required reading for anyone contemplating a career in equity analysis. It would be interesting and important to know, 15 years later, what if anything has changed in the way that Wall Street operates and what remains the same. A discussion of Mr. Rheingold's book by current top tier Wall Street analysts would provide such useful insights and help inform key stakeholders, including investors, prospective analysts and regulators.

[Ivan Krsnik · Rating 5 out of 5]

A fantastic dive into the conflicts of interest arising in investment banking between research analysts and bankers. If the bankers are working on a deal with a company, the analysts become incentivised to turn bullish on the same company and issue buy ratings. The book really blows away almost all credibility of analyst ratings.

It's a dry read for most of it, but picks up towards the end and ends on a high note with a discussion of introduced reforms and author's own recommendations. Ultimately, he recommends individual investors to stick to index funds or broad mutual funds, due to his opinion that most analyst ratings are unreliable and released information already stale and mostly reflected in the stock price by the time it reaches the public.

In an interesting piece of trivia, the author was succeeded in his role at Credit Suisse First Boston by Lara Warner, who would two decades later, as Chief risk and compliance officer, play a role in handling the Archegos blowup-up, which cost Credit Suisse 5.5 billion dollars and arguably led to its demise.

[Gemma Hegarty · Rating 3 out of 5]

I wonder how much unconscious bias may exist in the retelling of these accounts. It's an interesting read and highlights the conflicts of interest well. I find it somewhat ironic though, that after so many pages about bankers making money from encouraging buy/sales of stocks, that there isn't a conclusive argument for value investing where the plan is not to sell, also, why there is no steering individual investors awqy from Managed Funds whereby the highly paid bankers make those fat cat salaries from the fees the individual invariably pays in holding such investments.

[Andrew · Rating 5 out of 5]

Great insight into the inner workings of Wall street, presented & shared from a true insider during what may be considered a transitional period for the industry, a transition of grandiose implications.
I believe this title presents value for anybody seeking perspective in regards to the nature of information flow within the world of investing or for those whom possess interest in the bull market of the 1990's.

[Johan Monge · Rating 4 out of 5]

While this book is bulky, it provides an interesting look into the inner workings and role of sell-side research within an investment bank and how the profession has evolved. While many of the overtly illegal practices have subdued since the turn of the century, many of the book's underlying premises still remain.

[Naba Azam · Rating 4 out of 5]

Second year finance student here. I would be lying if i said I understood everything crystal clear but definitely learnt alot of new things. My first proper finance book and it was quite interesting! The writing was simple and engaging.

[Gerard Hallaren · Rating 4 out of 5]

I was a minor league analyst at a regional bank

This book explains why I never took the job at the big brokerage firm in fact listening to Dan Reingold makes me believe it's a good thing I never took that big step.

[Todd Thorstenson · Rating 3 out of 5]

An insider's account of a Wall Street analyst's of the telecom sector in the early 2000s is well written but too detailed for me at times. I would've like more information about about the Bernie Ebbers trial. The author begins the book with Ebbers' sentencing but doesn't revisit it.

[Adams Danse · Rating 4 out of 5]

Niiice. Wubba Lubba Dub Dub.

[Obalola Ibrahim · Rating 4 out of 5]

The analytical battle of Dan Reingold and Jack Grubman of the Wall Street:
Front row seat of how the Telecom industry stocks (dotcom) went down.

[Paschalis]

elibrary

[Peter · Rating 5 out of 5]

One of the most sneaky page turning books Ive read in a long time. Wasnt nearly as packed with shocks as the title had me expecting, but kept me captivated start to finish anyway.

[Madison · Rating 3 out of 5]

I was hoping for an exposé but instead read like a memoir / vendetta against Jack Grubman. The best part of the book was the afterword

[Ray · Rating 3 out of 5]

A good book and definitely worth a read, I would have given this a better review but I just felt that there was a lot of repetition and some of the comments about Jack suited the playground.

[Pamela Schneider · Rating 5 out of 5]

Always interesting to hear how money corrupts universally

I had no knowledge of independent investors until reading this book. The book is well written and easy to follow.

[Zak · Rating 4 out of 5]

Between 3.5 to 4.0*

[Rajesh CNB · Rating 5 out of 5]

If one really wants to know how a few greedy people can steal money from gullible stock market investors, this is a book that one should read. Not all things are controlled by law and regulation. It's astounding to see some of the world's best known firms taking the perfectly legal but entirely unethical path with ease and the conviction that there's nothing wrong in being unethical.


In the end many of those big names flaunted in management circles as gurus or whatever, are simply greedy thieves who wrested away the hard earned money of the small investor who came to the stock market to make capital available to the big corporates and benefit from the intelligence of people who made things that made life better. They broke the trust of these little guys. They in fact killed the goose that laid the golden egg.


Dan Reingold does a fabulous job of exposing the methods followed by these large organizations. More important than that he shows how a nexus can be formed to kill the goose. How it is possible to convince a group of people, by hook or by crook, into supporting you or in making them so what they think you should be doing!


I was horrified at the way Department of Justice, the SEC and many other regulators looked away while all this was happening and shied away to bring people to justice when accusations were made and trials conducted. They have given a message clearly to all around that the guilty can survive.

I would say it's an honest effort from Dan Reingold to talk about the hype that accompanies an analyst's job and the compensation involved. He didn't choose to justify the hype. At the same time, he also felt that he was not proactive enough to foresee what was about to come and even when he was, he didn't take up the leadership to prevent a few th8ngs which he could have prevented. Dan was honest in his book about all these.

When we read what everyone who was involved in in one of the largest corporate frauds in the world is presently doing, we can't help but wonder how they got away stealing millions of dollars. It no doubt reiterates and that too forcefully, what Dan had repeatedly said in the book. That the regulators looked away and settled for easy justice than bringing the guilty to pay for their crimes.

In the light of all these, Dan's prescription of what the regulation should be doing or focusing on is spot on. An eye opener. An honest account of facts. A must read for all those who wish to learn about management and the challenges thereof.

[JDK1962 · Rating 4 out of 5]

I picked this up mainly because it seemed an interesting read in the financial sector (where I make my living). It turned out to have significantly more resonance for me. Why? Because Reingold was a telecom analyst during the 1990s and early 2000s...and I was one of those employees at U S WEST, which was acquired by Qwest, who lost a significant fraction of retirement savings. Reingold goes into some depth on Qwest, the acquisition, and Qwest's subsequent flameout which lost a lot of bystanders--including virtually all the U S WEST employees who stuck around--a lot of money.

It wasn't like we employees were stupid: even then, anyone who invested knew about diversification. The problem was (a) a U S WEST stock fund was one of the investment options for employee contributed 401K monies, an investment option that sane people avoided because (b) 100% of the generous employer matching of employee contributions HAD to go into (and stay in) that U S WEST stock fund. I ran up a healthy employer match amount over the six years pre-Qwest, and worked there for another six years after the merger. Before the merger, my recollections is that the stock was in the $35-$40 range; when I left, it was in the $2-$3 range, and I left at LEAST $50-$100K lighter than I would have been if Qwest had stayed out of my life. So to this day, I have some serious bitterness toward Joe Nacchio (who went to jail) and Phil Anschutz (who was never even indicted, but sold well over $1.5B in Qwest stock when things were going well). Thanks a bunch, f--kwits.

Reingold (and his niece, who was his co-writer) spin a very interesting and readable tale. It's perhaps a little fixated on his rivalry with Jack Grubman, who also covered the sector and became the poster boy for bad analyst behavior. But man...talk about irrational exuberance.

[Noushin · Rating 4 out of 5]

This book was a really good read. It just gives you so much insight into the scenario of Wall Street at that time. The gradual growth of the telco sector which later turned into a frenzy of activities across the world as regular telephone companies made way for cell phones and later the internet, was all very interesting to see. As a reader the drama surrounding the two rivals as well as the slow unfurling of how the telecom bubble burst was just amazing. sadly the topic of 9/11 was barely touched upon. However it also brings to light how a majority of the failures at that time was not actually due to the 9/11 incident but rather an the very climatic event that had been waiting to happen for a while.
As for all the craziness over insane profits and indecent pay checks sudden power and lavish lifestyles, not exactly sure how i feel about it.

[Michael · Rating 4 out of 5]

Confessions of a Wall Street Analyst is an excellent account on the events preceding the burst of the telecom bubble. Dan Reingold gives a well structured and extremely analytical account on the events and circumstances leading to one of the biggest Wall Street collapses in history. Throughout the entire read you feel assured that this book was written by an expert on the subject matter. Dan's down to earth attitude adds even more to the credibility of this book and is a trait rarely found among people with millions in their bank account. The only criticism I have is that the author spends too much time elaborating on the conflict between him and his arch rival Jack Grubman.
Nevertheless a highly recommended read.

[Greg · Rating 4 out of 5]

Somewhat overlong and less infuriating than I had heard, this book was still interesting and revealing. The terrible truth that the individual investor can't hope to play the stock-picking game comes through loud and clear.

The author paints a rosy picture of his own actions, which seems maybe disingenuous, but so what? First of all, if he did anything wrong, he can't reveal it here since he never went to trial and thus isn't benefitting from double jeopardy. Second, wouldn't we be suspicious of his story if he did admit to deceptions? Lastly, what if he is clean? Apparently, not all readers would believe it (see other reviews of this book.)

A worthwhile read, but if you are already a conspiracy theorist, it'll just get you worked up.

[Jana · Rating 5 out of 5]

Exceptional detailed description of the inter-workings of Wall Street and the fundamentally biased relationship between the banking and research departments. The book chronicles the monumental impact of the internet age on the telecom industry, through the seemingly endless cash cow stage, to the devastating crash involving some of the largest financial and accounting frauds in history. While companies such as WorldCom were able to blind investors for a time with incredible EPS and growth, soon the Bernie Ebbers show would prove to be solely that of smoke and mirrors with no financial backing to stand on.

[David Robertson · Rating 4 out of 5]

This book was a great read. It is a fresh perspective from an analyst point of view on how Wall Street works. I especially enjoyed the meetings with analysts and CEO's that would dramatically move a stock. I even remember the days in the market where a giant move of a stock would take place and now I have a better idea of what caused it. This book also made me research some of the early 2000's criminals to see what they were up to now. Another key point is that most of the people perpetuating fraud seemed to get off without much penalty or any at all.

I recommend this book and am glad I bought it.

[Alex Rogers · Rating 3 out of 5]

Well written insight into the world of financial analysts, and in particular, the tumultous world of telco in the first decade of the 21st century. Reingold is a self-confessed nerd, but self-aware enough to be entertaining, and clearly an expert in his field. Hi writing style is clear and informative, and his account of the personalities in the field and clashes with some of his rivals is entertaining. I enjoyed the book, but reinforced my prejudices against the finance sector generally and analysts in particular.