Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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February 1, 2004

Portfolio Managers Are His Pals

By Nina Mehta

Corey Geog, senior securities trader at State Teachers Retirement System of Ohio (STRS), which manages $50 billion, offers one reason on why he took his current job. STRS houses its portfolio managers, traders and analysts in the same building. This has enabled him to build relationships that ultimately help him better execute what the pension fund's portfolio managers are trying to accomplish.

But physical proximity is not the only thing bringing PMs and traders together. Some federal laws have leveled the playing field for information, says Mary Lisanti. She's a portfolio manager who runs AH Lisanti Capital Growth Asset Management Group, a joint venture she formed with Adams, Harkness & Hill.

As Lisanti explains it, prior to Regulation Fair Disclosure, or Reg FD, she might have had a real value-added conversation with a company's management, even though it involved only public information. "Now they're so careful and cautious about what they say that it's harder to have those conversations," Lisanti said. "That's particularly true in large-cap land, where what everybody can know about a company is pretty much known, so that information is commoditized and your value-added as a portfolio manager is the price you pay for the stock."

After Reg FD, analysts stopped releasing company earnings during the trading day, said George Bodine, director of trading for General Motors Asset Management. With these announcements now coming after the close or before the open, buyside traders no longer have to "direct business to specific brokers so we'd be a first call in the event their top analyst was changing his opinion," he said. This shift has given traders more control over their portfolios.