Love it. And I would say ESG provides a wonderful moral high ground from which to make forecasts. If the forecasts go wrong, it was because other companies had better governance or the company in question was undermined by a lack of diversity off ideas and empowerment of their employees, etc.
For a sell side analyst a Hold is really a sell. But they don't want to ruin the IB team's chance of an ECM deal in the future. Nor do they want to be cut off from the company.
Buy side analysts and PMs, don't have this excuse.
What surprises me is that people who are totally wrong and don't really admit it somehow manage to continue on with their work. It points to a lack of failure culture in the financial business, which is not a good sign.
For every Jim Cramer who gets laughed out of Twitter every time he posts, there are plenty of other guys who got it wrong so often they should really give up their day jobs, but they seldom do.
Starting with the permabears who are as reliable as a stopped clock, continuing on with the Cassandras about which you so eloquently wrote, I remember this bloke who in April 2020 wrote on Seekingalpha.com how C19 would crash the global economy, no doubt about it. Two years later he was sure that the winter of '22 would see a severe recession or depression in Europe. No hedging, no remorse, nothing. How do these people stay in business? Don't clients do any research, or don't they care?
This is why I wrote my Against Cassandras series. It is incredible how long you can stay in business by just being consistently bullish or consistently bearish all the time. Shows you that it is not about performance, but about ideology.
Owning up to a failed forecast publicly only works in your favor if the perceived loss of credibility and reliability not overpowers the
effect on perceived self-orient. Considering human loss aversion it is natural to try to burry the mistake, especially if you are not in full control of all communication.
Love it. And I would say ESG provides a wonderful moral high ground from which to make forecasts. If the forecasts go wrong, it was because other companies had better governance or the company in question was undermined by a lack of diversity off ideas and empowerment of their employees, etc.
I think I have to start using that excuse :-)
For a sell side analyst a Hold is really a sell. But they don't want to ruin the IB team's chance of an ECM deal in the future. Nor do they want to be cut off from the company.
Buy side analysts and PMs, don't have this excuse.
Agreed. When I was on the buy side, I always treated Holds as sells.
What surprises me is that people who are totally wrong and don't really admit it somehow manage to continue on with their work. It points to a lack of failure culture in the financial business, which is not a good sign.
For every Jim Cramer who gets laughed out of Twitter every time he posts, there are plenty of other guys who got it wrong so often they should really give up their day jobs, but they seldom do.
Starting with the permabears who are as reliable as a stopped clock, continuing on with the Cassandras about which you so eloquently wrote, I remember this bloke who in April 2020 wrote on Seekingalpha.com how C19 would crash the global economy, no doubt about it. Two years later he was sure that the winter of '22 would see a severe recession or depression in Europe. No hedging, no remorse, nothing. How do these people stay in business? Don't clients do any research, or don't they care?
Consider how long and how public Cramer made predictions before he lost his credibility with the wider audience.
Shows how little attention past forecasts get at all.
And an inverse Cramer ETF was helpful in his downfall as well. Nothing like a public track record.
This is why I wrote my Against Cassandras series. It is incredible how long you can stay in business by just being consistently bullish or consistently bearish all the time. Shows you that it is not about performance, but about ideology.
Owning up to a failed forecast publicly only works in your favor if the perceived loss of credibility and reliability not overpowers the
effect on perceived self-orient. Considering human loss aversion it is natural to try to burry the mistake, especially if you are not in full control of all communication.
Trust = (Credibility + Reliability + Intimacy) / Self-orientation