Analysts cover everything. They are quoted in stories about the PS3 launch date, the impending death of the iPod Shuffle, and the earnings of search behemoth Google, but reading quote after quote from faceless ‘analysts’ does little to answer the burning question: who are these people, and what do they do all day?
A Day in the Life of an Analyst
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2006-06-08 3:43 pmyoursecretninja
I’m an analyst. I work in tech transfer and cover a numbe r of science & technology sectors for my clients. An analyst is not a journalist. A journalist should be reporting fact, unless they are writing an editorial. An analyst presents an argument based on fact. Facts are used to support a conclusion – one that may or may not be obvious and may or may not be speculative or predictive. It is not an opinion of what they think is going to happen. In the case of forecasting or predicting, it is an argument for what is going to happen – a conclusion based on premises – the strength of their premises determine the strength of the conclusion.
Sadly though, journalists often misrepresent analysts or sensationalize their arguments – failing to inform readers that an analysts finding are time senstive, limited in accuracy due to constraints, and subject to debate.
//EDIT: Thought I should add that analysts usually have a very different goal than journalists. For example, analysts try to help investors make better decisions, to help policy developers develop better policy, etc. Journalists SHOULD BE informing the public. In both cases, analysts and journalists should be objective!
Edited 2006-06-08 15:47
2006-06-08 4:52 pmnberardi
Oh I understand that there is a job called Analyst and they have a very difficult job.
However the comment was about Journalists quoting these myserious analysts. They never list them by name, just as they never list critics by name. And how would a journalist go about finding an analyst on a specific topic? I don’t know of any analyst yellow pages.
Your right about Journalists should be reporting facts, but we both know that is not true, and that is why they keep these titles of critic and analyst so secritive. IMO it is just them giving their point of view on a topic.
2006-06-08 5:28 pmyoursecretninja
Sorry about my comment; I thought you were equating analysts with the very journalists that report on their findings (or misrepresent their findings).
I would hope that editors would fact-check the work of the journalists that write for them; ensuring that if an analyst is reported on anonymously, that the journalist does have evidence that they actually did speak with the analyst but just chose not to disclose their name. However, I will not be so naive. I am sure there are a number of publications that are not properly edited; as I am sure there are a number of writers that are not responsible journalists.
However, to answer your question about how journalists find anlaysts; it’s easy. You can search through a brokerage report database offered by a company like Thomson; do a google search; contact a bank or a government organization (in Canada, Export Canada, Industry Canada). Or if a journalist is plugged into a specific industry; they likely already know who the analysts are that cover that industry or companies in it.
2006-06-08 6:36 pmvitae
All right, since we have your attention. What’s your impression of Dvorak?
who are these people, and what do they do all day?
… how does one get paid, get VIP invitations to conferences, influence stock prices, etc, for making public statements on subjects one knows absolutely nothing about? That is the defining trade secret of the analyst business.
Dvorak, for example, knows enough buzzwords to create a flamewar every other week, but unless he’s really undercover I doubt he understands much of the discussions he starts. I can see how he stays in business, but how did he get there?
OK, granted, analysts aren’t the same thing as journalists, but the difference is really a matter of how their pronouncements are reported. There doesn’t seem to be that much of a quality difference in most cases.
Edited 2006-06-08 15:54
2006-06-09 5:34 ambutters
The main problem I have with “analysts” is the interplay that goes on between the media coverage, the firm’s clients, and the stock prices. It seems very profitable for analysts to make a press release or a blog entry saying something negative about a company, wait a day or two, and then tell their clients to buy, buy, buy… or the same idea in reverse. Since their only loyalty is to their paid clients, you can never trust anything they say in the media.
Analysts and financial people in general have created their own little language to describe justifications for their conclusions. This is similar to technical jargon, but while technical jargon is intended to streamline description of technology (and is useless without well-known definitions), analyst-speak is intended to facilitate (or obscure) rational argument. Because no one knows what those words really mean, we’re just left with the conclusion to accept or reject based on… well, not much.
Here’s an excerpt from a recent analyst statement you probably read:
“The synergies of this seem consistent with the recent announcements by AMD to significantly increase capacity over the next few-years,” wrote analyst Apjit Walia in a note to investors Wednesday. “We believe ATI is a rare-buy in the semiconductor space right now given the near-term tie-up dynamics.”
This is intended to justify a motivation for AMD to acquire ATI, but it’s all nonsense. AMD is expanding its fab capacity to handle 30% of the microprocessor market by the end of 2008. This doesn’t even come close to adding the capacity to support ATI’s GPU volume, let alone explain why this has anything to do with how AMD would (hypothetically) integrate a business that has always been fab-less, relying on East Asian foundries to produce their chips.
The rest, as far as I can parse using my most liberal interpretive skills, means roughly: “we think now is the perfect time for AMD to buy ATI, because in the short term, it will be profitable.” Besides the fact that there is no real expanation of why it would be profitable (i.e. citing an example of a positive “tie-up dynamic”), he makes no mention of how the inevitable affects on AMD’s current partnerships (including the one with nVidia) will affect these complicated dynamics.
This is just one example, and it doesn’t even touch on the issue of analysts that certainly seem bought-and-paid-for, like the Maureen O’Gara’s and Laura DiDio’s of the world. I mean, what kinds of investors use anything these people say as sound, unbiased investment advice? Most of it isn’t even investment advice so much as it’s product marketing.
But, obviously there’s some “consistent synergies” between analysts and the executives they serve. They both decide on conclusions and then use obfuscated language to create the illusion of rational justification, it’s just that analysts add wildly speculatory assumptions to the mix.
2006-06-09 12:53 pmDeadFishMan
Agreed to every word. I couldn´t say it any better.
2006-06-09 3:56 pmGet a Life
That particular neologism is interesting in how effective at spreading it was. If you look at search results for “tie-up dynamics” you can see that it’s found its way onto a lot of sites and every usage pertains to this maneuver. It probably made some people some money.
How does this relate to Operating Systems, exactly?
It is a technique journalists use to quote their own oppionion or laymens that push the point the journalists is trying to get across.
When an analysts is talked about in an article, IMO, it is much like how journalists talk about critics of a certain thing. They mention faceless critics, which is probably their own oppionion and point of view they are trying to push on the reader. Same thing with analyst, it is just their oppion of what they think is going to happen.
And to answer your question for what they do for the rest of day, they write articles about the launch date of PS3, impending death of the iPod Shuffle, and earnings of Google.