Sunday June 13, 2004

I had been thinking of this topic for a while and Kieth Bierman's blog entry finally got me to blog on this.

Everything in this blog entry is 100% opinion since I have never worked with an analyst, but yes, I have opinions.

There is nothing more than I would like to see than an Analyst report with a link that says "Analyze this analysis". Click on the link and it takes you to a third-party page that says "Based on historical accuracy of this company on this topic, and this analyst in particular, there is a .4 probability that this this analysis actually means something." If you know of a web site like this, please comment on it so I can bookmark it.

And what's up with the "probability" thing? I personally think it is plausible deniability. When analysts started getting pinned to the wall, they added a "probability" factor. Now they have an out.

And are analysts completely on the level? There are those analysts who get paid to make a point. Companies pay analysts to make a point in their favor. Not coming to that conclusion means they will no longer be of value. Now, of course, coming to that point may be the 100% correct, and then the competition debunks it with their own analysis from another company (analyst shopping) who makes a 100% accurate counter point (ah, the chaos of statistics). I associate a .5 probability with this point so i have plausible deniability. How did I come up with .5? SWAG, man, SWAG. But at least I disclosed how I came about it.

Here is where I make my "reasoned argument". I remember back in ~1990 when Windows NT was being talked about taking over the world. My girlfriend at the time (now my wife) saw it on a magazine rack and said "I saw a Byte magazine cover which said, 'Is Unix Dead?'". "Uh oh, are you going to have a job next year?" Ironically, Byte magazine is dead (although byte.com is still around). Is this the enforcement of accountability for journalists and analysts? Poor analysis leads to market demand for something different? Perhaps. There are many more examples, but this is a blog, not an editorial.

After all of the blogging I have just done, would I ever want to be an analyst to "make things right"? No. I have to give my hat off to them for putting their reputation on the line. Analyst = imperfection. No one individual or company can be right 100% of the time, but where can i go to find out how often they are right so I can make a "reasoned decision"??