Market-Relevant Research Loop
Start with the market's question and connect analysis to action
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 97%
Harris describes useful Wall Street research as a loop driven by the market's current uncertainty, not by an analyst's private list of interesting topics. Begin with what clients care about and identify a consequential idea they may have wrong. Pull in specialists from credit, equities, strategy, or other adjacent fields because each can expose an angle the economist missed. Then carry the economic view beyond a growth, inflation, or Federal Reserve call into its market implications. The final discipline is speed: if attention shifts and the current draft no longer addresses the question of the day, change gears rather than finishing it for its own sake. The output is a timely explanation that corrects a live misconception and gives clients a fuller decision context.
Origin
Extracted from Masters in Business as Ethan Harris explained how sell-side economists make research useful to clients and markets.
Core principles
- 01Let current client concerns set the research question
- 02Challenge an important wrong idea rather than chase an idle topic
- 03Connect economic analysis to market consequences
- 04Collaborate across specialties to find missing angles
- 05Switch direction when attention moves
How to run it
- 1
Locate the live question
Find the issue clients and markets are focused on now. Use that demand to set the research agenda.
Pro tip Look for an issue that clients are obsessed about, not merely one that is intellectually interesting.
- 2
Find the disputed angle
Identify the important prevailing idea that may be wrong or incomplete. Frame the work around explaining why.
Watch out A topic without a live misconception may not warrant time-sensitive client research.
- 3
Add adjacent expertise
Collaborate with analysts who cover credit, equities, strategy, or other relevant areas. Use their perspective to uncover angles absent from the economic model.
Pro tip Expect another specialty to reveal something you did not get.
- 4
Connect economics to markets
Move beyond the economic call and explain what it means for financial markets. Give clients the full story rather than stopping at the disciplinary boundary.
Watch out An economic thesis with no market applicability leaves the client without a usable conclusion.
- 5
Recheck relevance
Before finishing, confirm that the question still matters. If attention has moved, switch gears and address the new question of the day.
Watch out Completing an obsolete draft can be less useful than starting over quickly.
In the wild
Harris contrasts weeks of preparation at the Federal Reserve with the rapid pace of Wall Street. When a new event changes what clients are focused on, he says an analyst may need to discard an interesting draft and start over on the question of the day.
→ The research remains aligned with immediate client demand instead of the analyst's previous agenda.
Harris says his team collaborates with credit and equity analysts because another part of research often sees a missing angle. The economist then extends growth, inflation, and policy calls into their market meaning.
→ Clients receive a fuller story that joins economic reasoning to financial-market consequences.
Common mistakes
Choosing research by personal interest
An interesting topic can still be irrelevant to the market's current decision. The live client question should drive the work.
Stopping at the economic call
Growth, inflation, and policy forecasts are incomplete for market clients unless the analyst explains their implications.
Working inside one discipline
Avoiding adjacent specialists makes it easier to miss a credit, equity, or strategy angle that changes the conclusion.
Is it for you?
Best for
It is best for analysts producing time-sensitive research for decision-makers in changing markets.
Not ideal for
It is not ideal for curiosity-led scholarship whose value does not depend on immediate client or market relevance.
From the transcript
“there's always some an angle that you didn't get”
“Otherwise the clients not getting a full story.”
“What I want to do is say that clients or have a wrong idea about X. They're all obsessed about it. That's wrong. I'm going…”
From the episode
Interview With Ethan Harris: Masters in Business (Audio)
Ethan Harris