2 Wall Street analysts came up with a game to make 'fun of the system' and played it for 5 years without anyone knowing

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March 14, 2017 7:14 PM

After listening to hundreds of earnings calls, these analysts needed to do something to break the monotony.

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Around midday on Monday, February 27, Paul Miller, a veteran banks analyst at FBR, got the news.

His services would be no longer needed.

Later that day, at CLSA Americas, Mike Mayo, a fixture on the finance-TV circuit known for his bold calls, heard something similar. The US arm of the Chinese brokerage was closing its research unit.

The two events put a halt to their careers as analysts. It also put a stop to a game the two had played for more than five years.

It started with a Bank of America earnings call five years ago, when the two dialed in and tried to ask a question. Neither was queued up on the call after a mix-up.

From then on, the two had a competition every quarter. The name of the game: always have your question answered after the other analyst.

The logic is straightforward. Bank executives sometimes queue up softball questions first on an earnings call, hoping to set a positive tone. Being called on early was a penalty in the game — the analyst to get pushed to the end of the line was clearly doing a better job of being tough on management.

Mayo and Miller would tally the score for each earnings season.

A part of the game was to add a bit of intrigue to what Miller — who said he has listened through 1,400 earnings calls in his career — called increasingly well-rehearsed and less-informative operations.

"It was to break up the monotony of listening to earnings calls over and over again, where they give you very little info," Miller told Business Insider. "No matter what tough question you asked, the CEOs would give you a political answer."

Mayo and Miller are also a little outside the Wall Street mainstream, with Mayo known for his big calls and Miller working for a smaller shop. The game, according to Miller, was also a way to make "fun of the system."

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