Analysts are like film critics. And for the uninitiated, by analysts I mean company analyst, those who come with buy/sell recommendation for stocks (and also do much more than that).
I am of the opinion that (well that’s how analysts generally give a disclaimer: P) that analysts mirror film critics to a large extent. Here are the commonalities:-
- They both give out predictions
- They both change their predictions based on latest available information (company earnings report in case of analysts and movie release in case of critics)
- They both are the not the target customers neither the target beneficiaries for their covered companies/movies. Movies are for the masses and their results benefit the producer. Companies on the other hand, give out results for equity holders and their target customers are definitely NOT ‘Analysts’
- They both have their own performance measurement scales in place. Critics have different measurement scales for different genre of films. Analysts too have different measurement scales (which analysts love to call ‘models’) for different type of companies
- They both are loved by the public/investors and hated by the film_makers/companies
- They have their own set of favourites. Critics have their set of directors whom they intentionally or unintentionally favour. Analysts too have their own set of favourite companies.
- They both have a rating system. Critics have a star rating system (generally a 5 point one). Analysts too have some thing similar (strong buy, buy, hold, sell, strong sell)
- They both have immense knowledge about their subjects but will never enter that field to make a film or run a company.
- They both go wrong
- But still, majority of the population go thru’ their review/report before watching/buying film/stocks.
Btw, film critics are also known as ‘Trade Analysts’.
So, the moral of the story is that… to become an ace Analyst, start watching movies… 😉