One recent example of a bearish analyst getting shut out of the information loop was CLSA analyst Mike Mayo, who couldn't get a meeting with Citigroup for two years. Eventually, after he made a very public stink, he got a chance to sit down with bank management in October. (Check out Mike Mayo's bank calls in a March 3, 2011 interview with CNBC.)
Few analysts have as much clout as Mayo, and as a result are presumably less likely to risk offending top managers of companies they follow.
That can lead to some fairly toothless research. Townsend says one stock he follows, XL Group, has gone from $80 down to $3 and back up into the twenties, while an analyst who has covered it that whole time hasn't changed his "market perform" rating on the stock.
Townsend declined to name the analyst.
"It leaves you kind of wondering why they're covering stocks at all," Townsend says.
Still, none of the investors interviewed by TheStreet would go so far as to say they have no use for Wall Street research. Not one says they buy or sell a stock based on an analyst's call, however.
Tom Brown of Second Curve Capital, another Wall Street analyst-turned-investor, says though in general he has little use for sell-side research, "maybe five times a year" he will receive a report demonstrating exceptional in-depth analysis. A recent example he cites is "an in-depth look at Bank of America's funding, the pressure on their margin and how it could be alleviated," from Sanford Bernstein analyst John McDonald.
Brown says he will pay for high quality research like that by doing more trading with Sanford Bernstein for a time — generating commissions for the firm.
He also values "the occasional-but-rare deep dive" into a company, or in the case of large companies, a line of business.
"You wish you saw more of that, but you just don't," he says.
Another one of the main things that make analysts valuable to Brown and other investors is their access to company management — the same thing that makes the analysts fearful of criticizing the companies they follow.
That access can take the form of, as Brown puts it, "I just was at company XYZ, and here's what I discovered."