Missing analysts
Filed in archive markets by leon on April 23, 2008
In the past, I have looked at how analysts are not as independent as they claim. There was evidence showing they are susceptible to various gifts and favors.
And now the credit crunch and weakening economy are showing up how bad they are. In the fourth quarter, almost 1800 equity analysts overestimated final results by 33.5 percentage points, the biggest miss ever, reports Bloomberg.
Bloomberg says the evidence suggests analysts rely heavily on guidance in making estimates, all of which helps them doing their own hard spade work.
If there is a lesson in this for investors, it's simple: don't rely on just one or two analysts before making your decision, and do some legwork yourself.
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Mr Wong
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