I Pre-Wrote My Research Reports Before the Earnings Call Even Happened
What two years inside equity research taught me about how Wall Street analysis actually works, and why most of it is theater.
When I worked as an equity research analyst, I had a secret that would horrify most retail investors: I wrote my earnings reports before the earnings call.
Not the final version. But close. The structure, the narrative, the thesis, the rating, all pre-written. After the call, I’d fill in the actual numbers, adjust a sentence or two if something surprised me, and send it out. Maybe an hour of editing on a report that looked like it took days.
The earnings call almost never changed our thesis. Not once in my time covering healthcare stocks did a company say something on a call that made me throw out a report and start from scratch. The calls were that predictable.
This isn’t because I was lazy (read: efficient). It’s because earnings calls are, by design, one of the most carefully managed pieces of corporate communication in existence. And if you’re a retail investor listening to them hoping for insight, or worse, making trading decisions based on them, you’re consuming a performance, not an analysis.
Let me tell you how the sausage actually gets made.
What an Earnings Call Actually Is
Four times a year, public companies host a conference call where management presents quarterly results and takes questions from analysts. The format is nearly identical across every company: a safe harbor disclaimer, prepared remarks from the CEO and CFO, and then a Q&A session.
If you’ve never listened to one, it sounds like this: calm, measured corporate-speak delivered by executives who have rehearsed every word. Revenue was up X percent. Margins expanded by Y basis points. The company is “well-positioned” and “executing on its strategic priorities.” Guidance for next quarter is in the range of A to B.
It sounds informative. It’s mostly theater.
Here’s why: everything management says in the prepared remarks has been reviewed by lawyers, vetted by investor relations, and rehearsed until it’s polished smooth. The goal isn’t to inform you. The goal is to present results in the most favorable light possible without saying anything that could trigger an SEC inquiry.
The language is deliberately vague when things are bad and precisely specific when things are good. “We saw some headwinds in certain geographies” means an entire region missed its numbers badly. “We’re pleased with the strong momentum in our core business” means the core business hit its target but everything else is struggling. Once you learn the translation layer, you realize how little actual information is being transmitted.
The Q&A Isn’t What You Think Either
The Q&A session is supposed to be where analysts push management for real answers. Sometimes it is. But more often, it’s a choreographed exchange where both sides know the rules.
Analysts ask questions they largely already know the answer to, because they’ve already built models, talked to investor relations, and formed their thesis. The questions are designed to get management on the record confirming or denying specific assumptions, not to uncover hidden truths.
Management answers by saying as much as they legally have to and as little as they strategically want to. If an analyst asks about a specific product’s growth trajectory, the CEO will give a directional answer wrapped in qualifiers: “We’re encouraged by the early trends and continue to see strong demand signals.” That could mean anything from “it’s our best product ever” to “it’s slightly above our internally lowered expectations.”
And here’s the part that would probably surprise most people: the order of the Q&A is often pre-arranged. The biggest institutional clients of the bank hosting the call get their analysts called on first. The questions from smaller firms or independent analysts come later, if there’s time. The whole thing has a hierarchy that’s invisible from the outside.
Why I Pre-Wrote My Reports
I pre-wrote my research reports because after covering the same companies for several quarters, the earnings call became almost entirely predictable. I knew what management was going to say because I’d already modeled the quarter. I knew the revenue range. I knew which segments would be strong and which would be soft. I knew the margin trajectory.
The call was confirmation, not revelation.
The only things that would genuinely surprise me were significant guidance changes (management raising or lowering their outlook for the next quarter or full year) or an unexpected event like a major customer loss, a product recall, or a strategic pivot. These happened rarely.
Everything else (the prepared remarks, the tone, the Q&A) I could have scripted myself. And in a sense, I did, because the report was already written.
This isn’t unique to me. Every analyst I worked with did the same thing. The reports had to go out within hours of the call to be useful to our institutional clients. You can’t write a 15-page report from scratch in two hours. You write the framework in advance and fill in the blanks.
What Wall Street Actually Cares About (It’s Not What You Think)
Here’s something that took me a while to understand: the buy-side (the institutional investors who were our clients, the hedge funds and mutual funds managing billions) didn’t care about our ratings or price targets.
Let that sink in. The “buy” or “sell” rating that retail investors treat as gospel? The institutional investors who actually move markets largely ignored it. They have their own analysts. They build their own models. They set their own price targets. Our rating was, at best, a data point they glanced at. At worst, they dismissed it entirely.
So what did they actually value?
Original, proprietary research that they couldn’t do themselves. Specifically, channel checks. This is primary research where analysts go out into the real world and gather data points that aren’t available in any public filing or management presentation.
This is where equity research gets genuinely interesting. And genuinely absurd.
The Channel Checks Nobody Tells You About
I covered healthcare stocks. Specifically, diagnostics companies, lab services, and genomics. The channel checks I did to generate proprietary data points for our institutional clients were some of the most ridiculous professional experiences of my life.
I called STD clinics across the country. One of the companies I covered made molecular diagnostic tests, including ones used for sexually transmitted infections. To estimate how many tests they were selling, I needed to understand testing volumes at the clinic level. So I spent days calling clinics, posing as someone researching testing options, asking about wait times, test availability, which platforms they were using, and how volume had changed. The data I gathered from those calls became the basis for a testing volume estimate that our institutional clients used to model the quarter.
I got my blood drawn three times in one day. I covered the two largest lab testing companies in the U.S. At the time, a buzzy Silicon Valley startup was promising to disrupt traditional blood testing with cheaper, faster technology, and investors were nervous. To assess the competitive threat, I needed to understand the current patient experience at the major labs and compare it to what this startup was promising.
So I walked into three different labs and got blood drawn at each one. Same day. Three needle sticks. I documented wait times, staff interactions, test menus, and the overall experience. That comparison became a section of a research report that went out to some of the largest healthcare investors in the world. (The startup, by the way, turned out to be a fraud.)
I crawled around on my hands and knees in a genomics lab. I covered a company that made DNA sequencing machines. Wall Street wanted to know how many units they’d shipped in the quarter. The company wouldn’t disclose this publicly. So during a lab visit, ostensibly to learn about the science, I got on the floor and crawled under a sequencer to read the serial number off the unit. If I could track serial numbers across multiple lab visits, I could estimate the install base and extrapolate quarterly shipments.
This is what equity research actually looks like. Not a genius in a suit staring at Bloomberg screens and divining the future of the market. A 20-something analyst on their hands and knees in a lab, trying to read a serial number, so a hedge fund can shave half a percent off their estimate for one company’s quarterly revenue.
What This Means for You
I’m not telling you these stories to entertain you (though I hope they do). I’m telling you because they illustrate something important about how the stock market works.
The information advantage is real, and you don’t have it. Institutional investors pay millions of dollars a year for research from analysts who are literally getting blood drawn to generate data points. You are competing against these people when you pick individual stocks. Not on a level playing field. On a field where they have resources, access, and information you will never have as a retail investor.
The “analysis” you see on financial media is the surface layer. The analyst ratings, the price targets, the talking heads on CNBC are the public-facing output of a much deeper machine. The real research happens in channel checks, management meetings, and proprietary data analysis that never makes it into the public report. What you see is the tip of the iceberg. What moves stocks is the 90% underneath.
Earnings calls are the least useful source of investment information available to you. By the time management is speaking on a call, the information has been lawyered, sanitized, and optimized for maximum corporate benefit. Analysts have already modeled the quarter. Institutional investors have already positioned. The call itself is a formality.
None of this means you shouldn’t invest. It means you should invest with clear eyes about what you’re actually doing.
If you’re picking individual stocks based on earnings calls, analyst ratings, and financial media, you’re bringing a knife to a gunfight. The people on the other side of your trades have more information, more resources, and more time than you do.
If you’re investing in low-cost index funds on a consistent schedule and leaving them alone for decades, you’re buying the entire market. This means you capture the returns generated by all of that institutional research without needing to compete with it. You’re not trying to outsmart the machine. You’re riding on top of it.
That’s what I do with the core of my portfolio. And it’s what I’d recommend to anyone who doesn’t want to spend their weekends calling STD clinics.
What to Read Next
📖 The Simple Path to Wealth by JL Collins. The book that convinced me to stop trying to beat the market with the majority of my money.
📖 The Psychology of Money by Morgan Housel. Explains why even smart, well-informed people make terrible investment decisions, and why behavior matters more than analysis.
🎧 Both are excellent on Audible. The free trial gives you one credit to start.
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