Thoughts on the Corona Virus and its Effects on the Stock Market and Independent Research


The following is excerpted from a recent briefing by Will Richards of the Research Alliance, a leading business development agency for independent research ( 

This is the third major market correction I have lived through while selling independent research.  The two previous corrections – the tech bubble bursting in 2001 and the financial crisis of 2007—had these results in common:

  • While, like the corona virus outbreak, the bubble and the financial crisis are recalled as specific events, in both cases it took about 2 years for the markets to bottom.
  • During each 2-year period, the importance of independent research soared.

During the bursting of the internet bubble, when the NASDAQ fell 77% from March 2000 to October 2002, I was in sales at economic research firm BCA Research.  It was a period of rapid sales growth for this independent research firm.

During the financial crisis, the S&P 500 fell by 50% from July 2007 to March 2009.  We had founded the Research Alliance in 2006, and this two-year period was one of dramatic growth for ourselves and our research partners.

We’ve been able to have a number of discussions with institutional buy-side clients to understand their perspective on the markets.  After 10+ years of a bull market, the market was over-valued.  Many clients argue that the market was overdue for a sell-off.  My conclusions are the following:

  • Don’t expect a quick fix from the fear instilled by the corona virus on the stock market.  Even if the virus passes quickly, it will take months or years for the market to regain confidence.
  • Ultimately, over the long run, the market’s resiliency has proven to bounce back – even if it takes time.
  • It is a good time to be in the independent research business, or to source independent research if you are on the buy-side.

Why does independent research benefit from a crisis?

  • The sell side bias towards writing positive reports becomes less popular when things go awry in the markets.  As an extreme example, one of the boutiques we represent is Chanos Short Research (Tom Chanos is the brother of James Chanos, founder of Kynikos Associates).  However, all the independents we work with have no hesitation to say ‘sell’.
  • The buy-side is looking for clarity and for information they can trust during this time.  If the independent firms stay close to their clients and help them out during this time, they can strengthen relationships and gain market share.
  • Independents can speak their mind more freely.  If they see more bad news coming, they can let clients know. 
  • During times of crisis, when an independent issues a ‘buy’ rating or identifies a positive investment opportunity, they have more credibility than a similar declaration from a bulge bracket sell-side firm.

For the full briefing, including investment ideas from each of the Alliance’s research partners, can be found here.


About Author

Will Richards founded the Research Alliance in 2006 ( to help boutique research firms meet their business development goals. In addition to over two decades of experience in sales and marketing, Will has extensive experience in selling independent financial research to institutional buy-side clients in the US, Europe, and Asia. From 2000 to 2004, Will was a key member of the team at BCA Research that developed a systematic sales process for opening new accounts and managing relationships with institutional buy-side clients. Will holds a Bachelor of Arts from McGill University. Will Richards can be reached at or 514-849-1991.

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