Reading “Confessions of a Wall Street Analyst” will leave you wondering how you can ever make a penny in the stock market.

Dan Reingold delivers a first hand account from the shoes of a telecom analyst on The Street and in the process reveals the secrets from the other side of the wall that give business and banking firms a hand up in the stock market.

An experience based in the WorldCom era, the amount of greed and corruption that prevails behind closed doors will knock your socks off, and quite frankly anger you if you’ve got money in the market.

An analyst is brought “over the wall” when confidential information about earnings or mergers is discussed, but never to be discussed with anyone, lest insider information be brought to the market.  Jack Grubman (CNN Money Article), Dan’s public enemy of the street was notorious for pumping up numbers and spilling the beans for the benefit of the banking side of his firm.  The problem was that the SEC either didn’t know about his activities, or turned a blind eye when they found out.

Dan reveals how an analyst could soften the blow of a down quarter or pump up the market in advance of a blowout by slowly leaking information a couple weeks before the news hit the wires.

The details are astounding, and is a must read for those that follow the market or aspire for greatness at the helm of a public company.

While the dot com boom is over (are we on the verge of another?) for now, and the corruption seems to be coming to the surface as a result of the WorldCom and Enron bust, it’s even more important to scrutinize who you get your information from, as you never know what the agenda or motive is from the person or firm which you received it.

Even Jim Cramer (wiki) suggests that you should never rely on a single source of information, but spread your information risk out over a wide range of analysts, and this book couldn’t reinforce that fact any more clearly.

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