A Book Review – “Full of Bull: Do What Wall Street Does, Not What It Says, To Make Money in the Market” – by Stephen T. McClellan

Two weeks ago, I was posted a review copy of the Stephen T. McClellan’s book: Full of Bull: Do What Wall Street Does, Not What It Says, To Make Money in the Market. Below you can find our doitinvest.com review…
I was quite curious about the book since it had a good press from other reviewers. Furthermore, the author was an investment analyst for quite a long time by then, so I thought it would be interesting to see the insider’s guide on how the big banks treat their investments.
Much of the text is autobiographical anecdotes about what it’s like to be an analyst. Those parts reminded me of “Beat the Forex Dealer”, the book written by Augusto Silviani, where he has a nice small chapter dedicated to the investment analysts. Silviani told there that the analysts are…well… full of you know what. The argument was that their only job became to protect the guild and not to balance too much on one side or another, unless there was overriding evidence on it. In other words, cover yourself and be able to pretend at any time that you were on the winning side.
The book works pretty well for the reader, since McClellan has some years of experience in the field. He is rather oriented towards the long term investor, therefore if you are a short term trader you might take the book as a part of your fundamental analysis education. What I found interesting was that the book could also be used for any prospective employer with some degree of success (at least you get much better prepared for an interview).
Another advantage of the book is the interpretation of what Wall Street analysts say in the plain words of the normal investor. There are quite few examples and if you are patient enough to read them you might be surprised at how many factors play in one analyst statement. Yet, I was also a bit disappointed since many of these pieces of advice are a bit obvious – for example when the analysts blame the poor macro economical environment it means that they still favor the company one way or another but want to hide its weaknesses. These kind of things are obvious and if an investor does not think about them, well, he is plainly naive.
Topics covered by the book include:
• what to make of analyst recommendations
• characteristics of good management
• analyzing a company’s customer base
• protecting your invested capital
• what to make with the analyst recommendations
• how to interpret events like stock buybacks
• how to analyze corporate ‘turnaround’ stories etc.
Please be aware that this book is targeted toward investors, rather than traders. This is why you will not read much about technical analysis or chart patterns in its pages. The focus is on fundamental analysis: interpreting news, fundamentals, and of course, analyst reports. McClellan possesses a very conservative style, which should appeal to the long term traders. Through his examples and his stories, he tells you how and why many events that are positive on the surface are actually covering up deeper problems. He tells you what kinds of companies, industries, and executives add to his confidence in an investment.

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