Interesting piece by Serena Ng in the Wall Street Journal yesterday about "channel checkers" -- individuals paid $20 to $75 per hour who actually go into retail stores and other businesses and "kick the tires" in order to check out sales, customer attitudes and a whole host of intangibles that are impossible to quantify in a spreadsheet. These channel checkers then report back to their clients -- usually a small Wall Street research firm or a money manager -- who are then able to sell this information to hedge funds or other big institutional clients looking for an inside edge. Have a hunch that a company may report numbers below consensus estimates? Go out and hire a channel checker...

It's all part of a changing of the guard of Wall Street equity research, as smaller, more nimble firms (like New York-based Majestic Research) take a bigger chunk of the market:

"Channel checks -- collecting data from a company's customers, suppliers, employees and even rivals to find out how a business is really doing -- have always been part of a stock analyst's duties. But with most Wall Street firms unable or unwilling to devote significant resources to this qualitative and often time-consuming process, a growing number of independent research outfits are making a living out of this niche. The work involves more networking and investigative reporting than analyzing balance sheets and income statements. The channel checkers go out and kick the tires, in the parlance, rather than staying in the office to scan securities filings or call investor relations departments. The idea is to spot a trend before it is widely known."

Anyone thinking what I'm thinking? What about hiring armies of bloggers to go out and channel check?