Transcript The Super Searchers on Wall Street

Success Strategies from
Super Searchers on Wall
Street
By Amelia Kassel From MarketingBASE
[email protected]
800-544-5924 or 707 829-9421
Overview
Super Searchers on Wall Street, one in a
series
Who are the Wall Street Super Searchers
Book Themes
Trends
Research Topics
Super Searcher Revelations, Tips, and
Wisdom
Web Sites and Databases
©Amelia Kassel 707 [email protected]
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Super Searchers – One in a Series
Super Searchers on Wall Street is part of
a book series edited by Reva Basch
www.supersearchers.com
Each book contains interviews with 8-12
top online searchers in a specific
discipline
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Super Searchers Series
Questions bring out types of research questions
asked, sources used and application of sources
from information specialists in
Business (Mary Ellen Bates)
Law (T.R. Halvorson)
Health and Medicine (Susan Detwiler)
News (Paula Hane)
Mergers and Acquisitions (Jan Tudor)
Primary Research (Upcoming – Risa Sacks)
Wall Street (Amelia Kassel)
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Who are the Wall Street Super Searchers?
Ten Interviews
All are experts in the use of financial
information that contributes to the
success of their organizations
All use
Commercial and specialty databases
Web Resources
CD-ROMs
Print Sources
©Amelia Kassel 707 [email protected]
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Who are the Wall Street Super Searchers?
Ten Interviews - Cont
The Wall Street information and
investment professionals hail from
Investment banks
Consulting firms
Academia
A Trade Publication
A specialty vendor
An Investigative Firm
©Amelia Kassel 707 [email protected]
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Who are the Wall Street Super Searchers?
Ten Interviews - Cont
Robert Magri
Principal & Market Data Vendor Manager
State Street Global Advisors, Boston
Roberta Grant
Business Librarian and Investigative Analyst
Kroll Associates, Toronto
Hodi Poorsoltan
Information Manager, AKA Information Doctor
General Motors Investment Management Corp., New
York
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Who are the Wall Street Super Searchers?
Ten Interviews - Cont
Martha DiVittorio
Manager of Information Services
Oliver Wyman & Company, New York
Chris Carabell
Senior Vice President and Investment Manager
Researcher
Liberty Asset Management Company, Boston
Gary Klein
Individual Investor; Management and Economics
Librarian
Willamette University, Salem, Oregon
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Who are the Wall Street Super Searchers?
Ten Interviews - Cont
Nathan Rosen
Vice President & Corporate Law Librarian Legal and
Compliance Department
Credit Suisse First Boston, New York
Janet Hartmann
Research Librarian and Registered Securities
Representative
William Blair & Co., Chicago
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Who are the Wall Street Super Searchers?
Ten Interviews - Cont
Tish Williams
Senior Editor and Columnist
Upside Magazine
Richard Harrison
Founder and Partner
Global Securities Information, Inc. (LIVEDGAR)
Washington, D.C.
©Amelia Kassel 707 [email protected]
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Book Themes
Trends
Databases
Terminology, Concepts, Jargon
Appendix
Value Added Research Services
Appendix with urls – also available free
www.infotoday.com/supersearchers/superwall.htm
©Amelia Kassel 707 [email protected]
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Macro Trends Affecting the
Financials Services Industry
Advent of the Web
Thousands of financial industry
professionals, end –users, with
access to information tools on the
desktop
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Financial Services Info Professionals
Trends
Recently, new libraries established or
considered for the future
IPs thriving and do not feel
threatened by end-user searching
Conduct in-depth research
Provide value-added analysis or
presentation
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Financial Services Info Professionals
Trends
New roles
Training
Intranet Development
Negotiation and rollout of desktop
systems
Consulting
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Financial Services Info Professionals Trends
Wall Street Needs Super Searchers: Nancy James
A search engine doesn’t know the end user’s
business, its goals and strategies, its
markets, customers, and competitive threats,
its language, concepts and rumors
A search engine, even with the best relevancy
ranking algorithms, doesn’t know what’s
important and not important to each
individual user
©Amelia Kassel 707 [email protected]
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Financial Services Info Professionals Trends
Wall Street Needs Super Searchers: Nancy James
A search engine doesn’t know how a user
wants information packaged, what to
highlight, what to leave out
A search engine, even with the best
language and domain experts behind its
indexing scheme, is slow to respond to
emerging trends
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Research Topics
Company research, comps, valuation
Detailed financial and statistical data
Due diligence and securities risk and fraud
Mergers and acquisitions
Private placements and mezzanine structures
Real estate investment trusts
Industry research
Subject research – many subjects
©Amelia Kassel 707 [email protected]
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Super Searcher Revelations
Power tips and wisdom
Strategies
Techniques
Financial databases and sites
Scope, interfaces, pros and cons
Why use one or another
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Super Searchers Revelations - Cont
How the Series 7 exam can help a researcher
Why everything worth searching for is found in
pieces
How to deliver structured data from multiple
sources
Why investment professionals pay for services
How to cross-check data against multiple
sources
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Relationships
Relationships with vendors are key
Relationships with users/clients
Anticipate needs
Keep an ear to the ground
Talk to project managers and ask for a
description of the big picture
Be aggressive and proactive
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
The Internet
“I use the Internet as one of many tools or
as a way to fill an information gap. It’s
something that you have to do”
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
The Internet - Cont
Few investment processes are
solely dependent on the Internet
Some Web-based versions of
commercial products lack
Complete data
Functionality
Analytical capabilities
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Power Tips and Wisdom
The Internet - Cont
Every client of mine that goes from standalone, to local network access, to the Web,
to desktop access for everybody in the
firm finds that twenty percent of their
employees all of a sudden become "expert
World Wide Web searchers.“
In fact, they’re not. They’re wasting time
and not being productive
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
The Reference Interview
What's most difficult before you even
start a research job is to figure out
the right question
After that, ninety percent of the battle
is done
It saves time and money when users
provide everything they already
know
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Research Techniques
If a request is super-important
because the information is going into
a consultant's analysis and the
numbers must be right, check two or
three different sources
Make phone calls to vendors to find
out how the figures are derived
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Power Tips and Wisdom
Research Techniques - Cont
Given sufficient time and money, the
broader the range of sources that
can be used to confirm and verify the
data, the better the end result
You need to use all available tools
because there is no one answer, no
one source, or one right answer
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Role of Information Professionals
Despite end-user desktop access,
information specialists play the
important role of information
consultant
They advise users about how to tap
the best sources to meet selected
requirements
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Power Tips and Wisdom
Search Tips
The SEC EDGAR search engine can
be searched by
Street address
City
Zip code
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Power Tips and Wisdom
Search Tips
By taking a company name through a wire
service or local newspaper, you can track
events and even clock them to the second
You can analyze how good news or bad
news affects
the price of a stock
the reaction time of competitors
or how analysts reset their earnings
projections according to news events
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Power Tips and Wisdom
Search Tips
It's less expensive to review the results
in KWIC (key word in context) first and
then request only items that seem to be
relevant
Several commercial databases have
this capabilities
Dialog
LexisNexis
Research Bank Web
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Power Tips and Wisdom
Sources
Major investment houses provide
information and specialized reports for
buy side subscribers
We rely on specialized CD-ROM databases
The World Bank provides information
about environmentally-sound or publicspirited companies
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Power Tips and Wisdom
Government Web Sites – Free and Save Time
The Federal Reserve Web Site
Research and Data, Working Papers, Section on
Finance and Economics Discussion Series
www.federalreserve.gov/pubs/workingpapers.htm
Topics covered, e.g.,
Why investors use credit derivatives to hedge
their risk
Historical bond yield spreads
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Academic Web Sites - Free and Save Time
Wharton a great site with academic
papers on topics of interest to us
www.wharton.upenn.edu/research.html
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Power Tips and Wisdom
EDGAR
Which EDGAR system to use may
depend on output options
Simple list of filings
Summary of the 10Ks
Visually-attractive presentation – actual
annual report
Complex research with power search
strategies (LIVEDGAR)
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
EDGAR
Don’t rely solely on EDGAR
Non-EDGAR filings can be important
Amendments to 10-Ks don’t have to be filed in
EDGAR
Some ownership filings are not required to be
filed electronically
Sometimes the last proxy before a merger is
non-EDGAR
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Global Securities Information, Inc
LIVEDGAR - www.gsionline.com
Document retrieval for items not in EDGAR
Provides specialized terminology for
searching SEC filings
Power searching capabilities
Freetext
Boolean
Proximity
Several databases available such as M&A
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Power Tips and Wisdom
IPOs
IPO prospectuses (S-1 Registrations)
provide a lot of information about
companies and industries
Detailed financial data
Competition
Risks
Marketing Strategies
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
IPOs
Some private companies going
public have filed and withdrawn
because of market conditions
However, S-1s were filed and are part
of the public record available from
EDGAR
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Deliverables
I sometimes spend as much time
preparing the finished work as I spend
finding the information to begin with
I both crunch numbers and deliver end
results as Word documents
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Deliverables - Cont
I often summarize from articles
Deliverables vary
When to spend a lot of time depends on the
user’s needs
I'll do whatever I can to make their job
easier
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Global Research
Company disclosure for other countries
doesn’t work the same as for the U.S
For International Company Filings
www.disclosure-investor.com
Click on “Guide to International Company
Filings by Country, Agencies, and Stock
Exchanges”
Sedar – www.sedar.com - Canadian Cos.
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Global Research - Corporateinformation.com
300,000 worldwide company profiles
U.S. public and private companies
15,000 reports from Worldscope
(abbreviated format)
Company Extensions Chart
• Foreign companies use GmbH (Germany),
AG (Austria, Germany, Switzerland), CVA
(Belgium), etc.
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Current Information
Daily newspapers on the Web are a
tremendous source for important
information
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Acquisitions & Mergers
In a merger, knowing all about the
competitors that you are sitting
across the table from makes it
possible to get the deal you want
SEC filings describe what your
competitors have done in the past
Historical company research
©Amelia Kassel 707 [email protected]
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Power Tips and Wisdom
Screening
Use a system for finding companies
that match several criteria
Variables may be:
SIC code
Sales size
P/E ratio less
A debt-to-equity ratio
©Amelia Kassel 707 [email protected]
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Screening Sources
FactSet
LIVEDGAR
Mergerstat
Securities Data (Thomson)
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FactSet: One-Stop Data Source with
Current and Historical Data
Compustat
Fundamental financial information
DRI (McGraw Hill)
U.S. Regional Economics & Demographics
Time Series
Extel
Company background, capital history, corporate actions
and news on 18,000+ global companies
Market Guide
Fundamental financial information on over 10,500
publicly traded companies
©Amelia Kassel 707 [email protected]
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Fundamentals
Financial statement data for a
company
Balance sheet
Income statement
Statement of cash flow o
Financial ratios
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FactSet: One-Stop Data Source with
Current and Historical Data - Cont
OECD - Organisation for Economic Cooperation and Development
A world-wide economic and social policy thinktank
GDP, production, prices, and interest rates
Value Line
Worldscope
©Amelia Kassel 707 [email protected]
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Screening Sources
Mergers and Acquisitions
Securities Data - www.tfsd.com
Other databases from Securities Data
•
•
•
•
Equity and debt offerings
Stock buybacks
Bankruptcies
Venture capital investments
©Amelia Kassel 707 [email protected]
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Screening
Mergers and Acquisitions
Mergerstat
Large Database of M&A Deals
Potential quality problem caused by
timing of data collection
• The disclosure information is sometimes
not filed in an obvious place because it's
attached to something else later on
• Database information is initially entered
from SEC filings or from press releases and
news articles
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Barra.com
Risk analysis statistics including
Betas
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Bloomberg
Known for fixed income information
tools for
Bond market
Currency
Money market
Fairly good array of equity data
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Compustat (S&P) www.compustat.com/www
Consider No. 1 source for U.S.
fundamental data
Standardizes data from 10-Ks
Creates a database with every company's
income statement figured in the same way with
exactly the same financial items
• The same information is required for all companies
but the line items and accounting treatment may
differ from 10-K to 10-K
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Datastream (Primark >Thomson)
Similar to FactSet
Several different data sources
Most of the data sources are their own
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Datastream (Primark >Thomson -Cont
International fundamental data
Thousands of historical data sets on
Inflation
Interest rates
Markets
Stock exchanges
Companies
Countries
©Amelia Kassel 707 [email protected]
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Selected Web Sites and Databases
Haver Analytics - www.haver.com
Government and private sources for
statistics
Time series with historical
information in spreadsheets
Fast and easy to use on the Web
Low Cost - $3 - $15 for data
©Amelia Kassel 707 [email protected]
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Mutual Funds
Liberty Conducts CI Research
Compares how their mutual funds
are doing in relation to competitors
Analyzes characteristics of their funds
by looking at the universe of growth and
income funds
Have a couple of thousand direct
competitors for just this one fund and
look at averages
©Amelia Kassel 707 [email protected]
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Mutual Funds Resources
Lipper Analytics - www.lipperweb.com
Two characterizations
An index of the thirty largest growth and
income funds
Lipper Growth and Income Average: The
average performance of all the funds
©Amelia Kassel 707 [email protected]
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Mutual Funds
Other Sources and Web Sites
Morningside
Mutual Fund Café
www.mfcafe.com/index.html
Financial Research Corporation
www.frcnet.com/FRC/frc_home.htm
• Trends
• Statistics in the mutual fund industry
©Amelia Kassel 707 [email protected]
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Why do you use one or another of
these systems?
Content and functionality issues
FactSet
• Better data quality and more databases
• Easiest-to-use interface
Datastream
• International Data
• Economic Data
©Amelia Kassel 707 [email protected]
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Due Diligence
Background Checks
Private equity companies and IPO
candidates are usually small and
haven’t been in the public eye very
much
Little is known about individuals
running small companies
©Amelia Kassel 707 [email protected]
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Due Diligence
Background Checks - Cont
Public records information is necessary
before, during, and after companies are
involved in transactions with each other
The attorneys are looking for potential
changes with regard to the economics of a
deal and need information that will help
them write a new clause
©Amelia Kassel 707 [email protected]
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Due Diligence
Background Checks - Cont
News Sources
Public Records
Require several sources to get the most
coverage possible
©Amelia Kassel 707 [email protected]
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Public Records
Information America
Improved Interface
Contains
Bankruptcies
Lawsuits
Liens and judgments
UCC (Uniform Commercial Code) filings
Skip tracers –addresses of an individual
• Search by name or social security number
©Amelia Kassel 707 [email protected]
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Public Records
Other Databases
ChoicePoint (was CDB-Infotek)
KnowX
Web-based
Low cost for occasional users
From Information America
©Amelia Kassel 707 [email protected]
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Court Research
Dockets
Monitor and retrieve dockets for
most federal district courts for
finding cases involving
Issues
Clients
Competitors
Law firms
Judges
©Amelia Kassel 707 [email protected]
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Court Research
Sources for Dockets (Listing of Cases)
Courtlink
CourtExpress
Pacer
LexisNexis (Index to Dockets)
©Amelia Kassel 707 [email protected]
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Public Records
LexisNexis
UCC (Uniform Commercial Code
INCORP Library
Doing Business As for 50 States
Mega - Case Law for the U.S. and
States
Can no search case law free on
Lexisone
©Amelia Kassel 707 [email protected]
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Quality & Reliability
Investment banks must have pristine
data
Use value added sources like Securities
Data and
Use Global Access for actual
documents
• Corporate finance will look at several
sources to compare figures
©Amelia Kassel 707 [email protected]
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Quality & Reliability
Stock Web Sites
Information is several steps away
from primary data
A site may have Hoover's Company
Profiles and also use Media General
for financials
Data is taken from the SEC but the more
times it’s processed the more chance
there is for error and confusion
©Amelia Kassel 707 [email protected]
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Quality & Reliability
Stock Web Sites - Cont
You can’t be sure of the quality of the
numbers and how current they are
Are they adjusted everything for splits?
Is the most current quarterly release
incorporated
“I tend to stick to sources such as FactSet. It
clearly states what’s included and what’s
adjusted.”
©Amelia Kassel 707 [email protected]
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Quality and Reliability
Web Information is Suspect
Make sure you are actually looking at
the company’s Web site
Verify Web site urls in another
source, such as a reliable directories.
©Amelia Kassel 707 [email protected]
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Staying Current
Bus-L
Scout Report
Search Engine Watch Newsletter
©Amelia Kassel 707 [email protected]
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Staying Current
Periodicals
Red Herring
Upside
Business 2.0
Barron’s
Economist
American Banker
©Amelia Kassel 707 [email protected]
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Summary
Recognize that a wide variety of
sources exist to assist in answering
questions
Never rely too heavily on any one
source
Use extreme care with any source
before determining its value
©Amelia Kassel 707 [email protected]
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Summary - Cont
Read as much and as widely as you
can
Talk to people
There’s a great network of wonderful
teachers and mentors out there waiting
to be tapped
©Amelia Kassel 707 [email protected]
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Success Strategies from
Super Searchers on
Wall Street
By Amelia Kassel From MarketingBASE
[email protected]
800-544-5924 or 707 829-9421