How Wall Street Works

I studied finance in college, where I was taught to value a company by building a discounted cash flow model. Then I got to Wall Street and found out almost nobody values companies that way. Stocks trade on multiples. The DCFs mostly sat in a drawer.

That gap between the theory and the practice is what this pillar is about. How earnings calls actually work and why analysts can pre-write their reports before the call even happens. Why the buy-side ignores sell-side ratings and pays instead for channel checks, which is where the real research happens and where I once crawled under a DNA sequencer to read a serial number. Most of what people know about Wall Street is the version Wall Street wants them to see. Keep reading for a look behind the curtain.

Start here:

I Pre-Wrote My Research Reports Before the Earnings Call Even Happened The earnings calls, analyst ratings, and financial media you use to pick stocks carry far less information than they appear to. I spent two years producing that research from the inside, and seeing how it gets made is how you learn to separate the signal from the noise.

How Wall Street Makes Money From Your Confusion The financial products that feel free are charging you anyway, and the harder one is to understand, the more it tends to cost. Once you can spot the pattern, you can tell which products are built to serve you and which are built to confuse you.

“Free” Trading Isn’t Free. Here’s What You’re Actually Paying. Zero-commission trading still costs you, in four different ways most people never see. The largest one isn't a fee at all, it's a behavior your broker quietly encourages because it makes them money and costs you returns.

Learn more:

I Analyzed Stocks for a Living. Here's What It Taught Me About Building Wealth. What two years of professional stock analysis actually taught me, starting with the pick my team got wrong for reasons no model could have caught. The professionals have better information, faster execution, and a 55-60% hit rate. The one real advantage you have over them is the one nobody can take away.

You Probably Don't Need a Financial Advisor "Financial advisor" is one of the loosest titles in the professional world, covering everyone from a legal fiduciary to a salesperson on commission. The difference decides whether you're getting advice or a sales pitch, and it can cost you several hundred thousand dollars over a lifetime. How to tell which kind you're talking to, and how to know whether you need one at all.