Why stockpickers should get out more

In Joseph O’Neill’s novel “Netherland”, a jaded equities analyst, covering oil and gas firms, confesses to the tricks he uses to add credibility to his stock picks. “Voice a first-hand opinion about the kebabs of Baku”, he says, “and people will buy almost anything you follow up with”.Financial analysts, like journalists, split their time between deskwork and roadwork: meeting executives, inspecting operations, tasting the local cuisine. Are these escapes into the outside world worth it? Travel can be eye-opening. Managers may reveal more in situ than they would on an earnings call. But roadwork is also time-consuming and potentially misleading. Charismatic managers with flashy facilities can employ their own tricks. Stray impressions can skew a visitor’s judgment.