James P. Hanbury, an analyst at Schroder & Co., rode last year's roiling market like a champion surfer.

His downgradings came just before the market fell, and his upgradings just before it began to recover.

Because he knew when to ride a stock - and when to wait for the next wave - he was the top-ranked analyst covering brokerages and investment advisory companies in American Banker's Wall Street Sharpshooters survey.

Of 11 analysts in the group, Mr. Hanbury came closest to correctly predicting earnings for brokerage firms. He had an average relative error rate of 0.799 on his 48 estimates. His forecasts for Donaldson, Lufkin & Jenrette Inc. and the asset managers T. Rowe Price and Alliance Capital were the most accurate.

Thomas Hanley of Warburg Dillon Read came in second, with an average error rate of 0.849 on his 22 estimates. And Richard Strauss of Goldman, Sachs & Co. placed third, with an average error rate of 0.949 on his 39 estimates.

Forecasting earnings for brokerage firms is particularly difficult because their earning tend to be volatile and the risks are hard to predict.

Mr. Hanbury said he uses detailed models to evaluate the 10 brokerage and investment companies he follows.

The analyst said that he looks at a company's market share, bond issuance, mutual fund activity, and management team to help estimate revenues. Mr. Hanbury also has a perspective to which few analysts can lay claim: his 30 years of investment experience.

Brokerage stocks are among the best investments, said Mr. Hanbury, who is 57. Banks are having trouble with revenue growth, he said, but growth rates for brokerages are strong.

"For the last 25 years, brokerages have been eating banks' lunch," Mr. Hanbury said. "That's why so many banks are trying to buy brokerages or investment companies."

Brokerages suffered from last year's downturn, but their business started to come back at the end of the year, he said.

Mr. Hanbury's favorite stocks include Morgan Stanley & Co., Lehman Brothers, and Citigroup.

He acknowledged that, like the rest of the Street, he "didn't see Russia coming."

"We have never had a situation where a country defaults on its own Treasury bill holders," he said. "Countries have defaulted on foreign creditors in the past but not on their own bills."

"Russia caused a real panic, and it was the first time since the 1920s that you had a credit crunch driven by the securities market," he added. "Markets have gotten a hell of a lot more important."

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