On analysts consistently selling down Apple

By | 2012/01/28


Selling down Apple

In most lines of work, there’s a word we use to describe people who consistently fail at their jobs. Whether it’s a system administrator who constantly does the wrong thing and crashes servers, or a checkout assistant who breaks eggs every time he places them in a bag, or blood test analyst who constantly sends back inverse results, the one word eventually has to be used to describe their work:


That’s not to say that they’re incapable of working, but eventually if we were their boss, we’d suggest that they may want to move on to another job that they may fare better at.

Yet, there appears to be a line of work where incompetence in a job is completely ignored – financial market analysis. Oh, you could readily say that the GFC exceptionally proved this, but ironically what seems to consistently prove it outside of crises is the attitude so many financial market ‘analysts’ have towards Apple’s stock price.

“Sell! Sell! Sell!”, they cry, “Everything is going to turn to dust!”

Except, time and time again, it doesn’t. Over at Daring Fireball, John Gruber maintains a “claim chowder” set of articles pointing out grossly inaccurate predictions made by (mostly) analysts about how Apple is about to crash and burn in a spectacular way. iPad killers, iPhone killers, iOS killers, and, just as frequently, stock prices.

So, here’s a few questions I have relating to these analysts:

  1. If you are employing someone who makes these wildly inaccurate claims, what steps are you taking, and have you already taken, to address the significant lack of competence in your employee?
  2. If you are a self employed analyst making these predictions, have you ever been formally trained in any form of economics?
    • If you have been formally trained, and these are your logical conclusions, can you show your working?
    • If you have been formally trained and these were just guesses, don’t you think you should start behaving more professionally?
    • If you haven’t been formally trained, what insight led you to the realisation that you could successfully do this work?
  3. Is the primary method of distribution of your postings via a website where the primary means of income generation is ad/click-through revenue?
    • If so, wouldn’t that suggest a conflict of interest? After all, your primary motivator would not be accuracy, but driving up the number of clicks on ads to increase revenue. That’s economics 101 – sell more stuff.
    • So wouldn’t it be necessary to declare that conflict of interest by citing, on your website, that your primary means of income is ad revenue and your posts are designed to drive that traffic?
  4. Alternatively, are you a Microsoft or Google Fanboy, who is desperately seeking to validate your own product obsessions by trying to shit-can the competitor?

I’m afraid that I’ve long since had to give up on Hanlon’s razor for these analysts and their predictions, and so we must revert to Occam’s razor, and say that they are either:

  • Incompetent or
  • Malicious or
  • Both incompetent and malicious.

I’d suggest it’s time the press stop listening to these sorts of fools – except the much of the press, too, wilfully plays these same games, so they’re just as culpable.