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Call him the Insider. When telecom chieftains like Bernie Ebbers at WorldCom or Verizon's Ivan Seidenberg want to know Wall Street's rumblings or just toss around a few ideas, they frequently turn to a 46-year-old veteran Salomon Smith Barney analyst named Jack Benjamin Grubman. His fingerprints are all over some of the biggest deals of the past decade: MCI/WorldCom, Bell Atlantic/GTE, and SBC/Ameritech, to name a few--to say nothing of the proposed WorldCom/Sprint merger just slammed by the Justice Department's antitrust division.

This consigliere role, which is often criticized by those who say he has overstepped the proper bounds of a Wall Street analyst, is something that Grubman not only refuses to apologize for but openly, even brashly, revels in. (These banking relationships also help him earn $20 million plus a year.) In Grubman's and many other analysts' minds today, crunching numbers and issuing forecasts aren't good enough anymore. To pick winning stocks, they contend, you have to know the players as well as their companies. "There's a synergy between doing a lot of banking and being a good research analyst," says the wiry amateur boxer, punching out the words in his North Philly accent. "If all you do is look at a spreadsheet, you're gaining less than 50 percent of what you need to know. I get to do my due diligence from ground zero."

But can Grubman cultivate that inside game and retain his credibility among investors? Look at the record. One of the bluntest critics in the telecom sector, he's also one of its most accurate stock pickers. The fact is, Grubman, who spent eight years at AT&T before becoming an analyst in 1985, has been able to identify trends faster than his fellow analysts. He was among the first to recommend a little long-distance carrier from Mississippi that eventually became WorldCom. His calls on Qwest and Level 3 underscored major shifts in the industry away from the traditional players. And his longtime bearishness on AT&T threw the ultrasound on Ma Bell's hardening arteries.

That's not to say the strategy hasn't ever backfired. Last November, Grubman changed his stance on AT&T and said CEO C. Michael Armstrong was correct in refocusing the company on the higher-growth areas of corporate, wireless, and broadband service. Soon after, AT&T made Salomon one of the underwriters on the $10.6 billion IPO of its wireless tracking stock. The timing of the deal raised red flags among Grubman's critics, despite the analyst's assertions that there was no quid pro quo. Then, earlier this year, AT&T issued a profit warning that sent its shares into a massive decline.

Grubman went ballistic, delivering a cutting research report and lowering his AT&T price target from $75 to $65. So blunt was he that he claims Armstrong grumbled openly to Grubman's boss, Citigroup's Sandy Weill. Regardless, the report triggered more selling in the stock. "I didn't like the fact that we went out on a limb and recommended AT&T, and then right away they stumbled over things they should have known about," says the still-angry analyst. "They clearly have to get their act together."

And that had better happen fast. As Grubman sees the industry shaping up, there will be just seven or eight global gorillas that control telecom on the international level, with a similar number handling domestic demand. Consolidation, based on the need for immense loads of capital, will be the consuming trend, along with the race to provide bandwidth. Among the winners he sees is WorldCom (WCOM)--despite the ailing deal with Sprint. Its sales force, products, account structure, and pervasive network will make it a dominant force, says Grubman, who gives the stock an $85 to $90 12-month price target. Likewise, Global Crossing (GBLX) is growing revenues at a 25% clip and could be a $70 stock. "Not only do these two have the wherewithal to become global players," says the analyst, "both stocks are dirt-cheap."