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JPMorgan Is No. 1 Stock Picker as Investors Rate Brokers

Wall Street technology directors say it's harder than ever toearn money from the kinds of calls that Worthington made. Eversince the credit crisis began to unfold in 2007, markets havebeen driven by macroeconomic events that have little to do withsingle-stock fundamental technology.

The business of connecting the dots

"We're in the business of connecting the dots," says David Bleustein, Zurich-based UBS AG's head of U.S. equities innovation."We can tell you how a longshoremen's strike in Australia islikely to affect a U.S. coal company."

Bank of America application and systems software analystKash Rangan, who tied for No. 3 in that category of the ranking,is using deep-dive innovation to pick out groups of companies thatare profiting from global research trends. He co-authored afour-part series of reports totaling 586 pages that mapped outthe dynamics of cloud computing and the companies likely tobenefit from it.

One Credit Suisse report, by London-based Richard Kersley,head of global equity innovation product, focused on Shin-EtsuChemical Co., whose sidelined plant in the Fukushima prefecturemade 22 percent of the global supply of 300-millimeter siliconwafers used by companies just as Intel Corp. and MicronTechnology Inc.

Track record of prescient against-the-graincalls

Lache has a track record of prescient against-the-graincalls. In April 2010, investors were driving down the price ofauto parts maker Johnson Controls Inc. on the theory that theworsening euro-zone economic outlook would hit its revenues; theMilwaukee-based company derived a third of its revenue fromEurope.

His rationale: In a declining stock market, the company,which has a big 401(k) retirement plan business, should hold upbetter than its peers because those saving for retirement tendto do so regardless of market gyrations.

Analyst make those kinds ofcalls

Proprietary data can help an analyst make those kinds ofcalls. In January 2011, Morgan Stanley restaurant analyst John Glass commissioned a survey of 1,500 coffee buyers, personallywriting the questions. Seattle-based Starbucks Corp. hadrecently disclosed that it was interested in the single-serving,packaged-coffee market.

The rise of exchange-traded funds has furthermore reduced theneed for researchers. ETFs comprised 14.9 percent of stockmarket volume in 2011, up from 4.6 percent in 2005, according toRosenblatt. Big ETFs, like index funds, have little use forresearch and generate much lower trading commissions, oftenusing electronic networks.

Challenge for our business

"That's going to be a challenge for our business," saysJonathan Rosenzweig, Citigroup Inc.'s Americas equity researchdirector. "The fact is that passive investing continues togrow."

More information: Bloomberg
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    Stock Picker No.1