The stock analysts; the Wall Streeters who tell you when and what to buy and sell.

• Author: Rothchild, John

The Stock Analysts

Have you ever thought of calling your analyst? I mean the stock market kind, not the other kind. The one who writes the reports that your broker sends you, along with the little note that reads: "Our firm highly recommends this purchase, as noted in the enclosed.' For some reason, I never thought an analyst was an actual person you could contact, until I was helped along by the dozesn of Wall Street insiders I met during my year-long foray into the world of high finance.

I attended a meeting--actually a small gathering of a committee--within the New York Society of Securities Analysts. Frankly, it was depressing. In this booming field, this was an unusually sad group of white-collar professionals in their mid-to-upper forties who were constantly complaining about the younger, more aggressive analysts that the brokerage houses now prefer. They've had some reason to fret since hordes of college seniors heading for Wall Street have been particularly eager to become analysts. I was surprised, then, but not too surprised to find out that of the 1,250 students who graduated Yale in 1985, over 400 applied to be analysts at First Boston.

Listening to their stories at the meeting, I found out several useful things: (1) there are 15,000 analysts at large in the country and mostly in New York; (2) analysts at brokerage houses are expected to serve us, the stock-buying public; (3) some analysts, called "quants,' speak a form of calculus, so nobody can understand a "quant' except another "quant'; (4) most analysts have MBA degrees and are very well-informed; and (5) they may be the first to know when to buy and when to sell stock.

This latter point was exciting, and made me sorry that I hadn't learned any of this earlier. The day after the meeting I watched the stock I had bought seven months before, 5,000 shares of Angstrom Inc., makers of high-tech dies, plummet as the Dow Jones average jumped 41 points. It was up more than 300 points since I started my journey--a fact I'd been trying to ignore. Worse than losing money in a bad market is losing it in this greatest bull market in history, as some already have called it. Frantically, I called my broker, Ms. Linda Garrett of Prudential-Bache.

As I picked up the receiver and started to dial, I was overcome with conflicting emotions. First, there was the dilemma of selling or not selling. Any stock you hold might eventually go up, but the act of selling at a loss forces you to admit you made a mistake. And, I hesitate to mention it, I also worried that selling the Angstrom might hurt Ms. Garrett's feelings. Then I reminded myself of something I'll leave with you as a useful hint: Don't continue losing money just to keep your broker happy.

By the time I'd finished dialing, I'd nearly talked myself out of what had to be done. Just as Ms. Garrett picked up, I reached a sensible compromise with my emotions: sell half.

"What's the Angstrom worth?' I asked.

"1 13/16.'

"Is there anything else an analyst would recommend? I'd like to work with an analyst.'

"Funny you mention it. Just a while ago, I was listening to an analyst over the morning call on our squawk box. Gillette. Nancy Hall says it's a buy. She's touting the domestic story.'

(The "squawk box' is a loudspeaker connecting each field office to the home office. In the "morning call,' the analysts broadcast their latest recommendations to thousands of local brokers. That's how many brokers get the new ideas they pass along to you.)

"Who's Nancy Hall?'

"Our cosmetics analyst in New York.'

I got so excited at this chance to get in early on an analyst's best bet that I put in the Gillette order on the spot. We sold 2,500 shares of Angstrom for $4,289.75, a loss of $781.82, and invested nearly all of it in 53 shares of Gillette at 79 1/4.

As soon as I bought it, I called Ms. Hall. Getting through to the analyst was easier than I expected. The switchboard operator at Prudential-Bache connected me right to her line and she answered her own phone. I introduced myself as a writer and a Prudential-Bache client who'd taken a major position in one of her stocks, and who wanted to make sure he'd done the right thing. She kindly agreed to let me visit her office.

Prudential-Bache is housed in one of the many high-rises at the southern end of Manhattan along Water Street. Ms. Hall's office was located on an upper floor. I'd say the waiting room was full of fine antique furniture, but I can never tell an original from a copy.

Nancy Hall came through the far door to greet me. She is tall and beautiful, a thin, lime-colored scarf hung like a dorsal fin along her back. In any police line-up, I would have picked her for a fashion model and not a securities analyst, whom I would have expected to be stooped and shopworn.

She escorted me down a hallway and into her cubicle, which had a wonderful view of the harbor. Atop the usual clutter of pamphlets and magazines were samples of various shaving and menstrual products from the cosmetic companies that Ms. Hall analyzes. In fact, she seemed to be running a little drugstore counter there. Before I was able to sit down, she handed me the newest Gillette disposable razor, a brown one that swivels, and invited me to try it out and give her an opinion.

Ms. Hall is as charming as she is attractive. She said she'd been an analyst for only two-and-a-half years and worked as an editor at Harper's Bazaar before that. It was comforting to hear her say that being a securities analyst is a lot like being a journalist. Like a journalist, she works long hours, 10 to 14 a day. She has a journalist's beat, cosmetics. She writes "stories' on the dozen or so companies she follows. Less like a journalist, in my experience, was that her base salary fell somewhere between $125,000 and $200,000 a year, plus generous bonuses if her stories turned out to be true.

When it came to Gillette, Ms. Hall congratulated me on a wise choice. Though she might have preferred Avon herself, she was certain that Gillette wouldn't disappoint its shareholders. "We've liked the stock since it was $50,' she said, "and we still like it now.' She explained that Prudential-Bache had a rating system from 1 to 5, with 1 for "aggressive purchase,' 2 for "accumulate,' 3 for "average performer,' 4 for "swap,' and 5 for "sell.' Each stock was assigned two numbers, the first for its near-term prospects, and the second...