Why we don’t need Analysts

The world is a very complex place and as chaos theory suggests, a minor event in one part of the world can trigger a chain of events causing huge events in another part of the world. Still, I try and boil things down to simple a term, which usually causes trouble or at least gets Deb very frustrated with me.

Take the stock market, for example. The Market reacts less to a company

2 comments

  • I don’t think that the shutting-up’s going to happen anytime soon, for various reasons I’m not sure need going into at this point.

    Not sure if this is related or not: If people in high corporate places are getting nervous because more of the rest of us are shopping more carefully than we were, then I suspect that we’re going to have to be careful that they don’t make their perceived problems reality to prove themselves to be Always Right.

    Not sure if I’m right about this…

    Dwight

  • Tom Galloway

    Why do stock prices go down if they don’t meet analyst’s predictions, even if they’re generally positive? Because the price of the stock already reflected the expectation that the analyst prediction would be correct. Thus, Lexcorp’s stock was already mostly, if not completely, priced assuming their profits would be up by 12%. So when it turns out that they’re only 8%, the price readjusts to reflect the actual reality as opposed to the predicted reality.

    On the other hand, given the manipulation, inaccuracies and laziness shown during the period from when Google announced its IPO to the actual IPO, my opinion of financial journalists dropped down to close to zero. Look at the actual numbers (and how they’re obscured) as opposed to what people are writing about them, taking into account the public image only so much as it’s affecting the price one way or the other.