Comments on: Trust Analysts Blindly – Lose Money

By: Silicon Valley’s Circle Jerk Finds a Friend on Wall Street : The Drama 2.0 Show

Mon, 11 Aug 2008 21:31:09 +0000

[...] my past criticism of “analysts,” I’ve used the “analyses” provided by Citigroup’s Internet analyst Mark Mahaney as examples [...]

By: Others Start to Ask “What is Mark Mahaney Smoking”? : The Drama 2.0 Show

Tue, 20 May 2008 03:28:31 +0000

[...] my recent post about the absurdity of the predictions and projections frequently promulgated by research firms and [...]

By: Paul

Paul — Sat, 10 May 2008 16:31:27 +0000

While I would never shy from throwing stones at investment bankers just for the fun of it, I don’t think you are entirely justified in this case.

You seem to have made the mistake that many people make; when they hear the possibility of X occurring is 90%, they think that means 100%, and when X does not occur, they cry that the initial estimate was incorrect. Had he said it had 100% chance of occurring then I would agree with you. But many were surprised at Yahoo’s refusal to accept the higher offer, and in hindsight his 60-90% probability range was not unreasonable; the outcome just fell in the 40%-10% range of unfavorable outcomes.

It’s like poker – you will win over time by playing the odds, but you will still lose hands occasionally even when the odds are significantly in your favor.

Cheers
Paul

By: Laurence

Laurence — Sat, 10 May 2008 09:12:59 +0000

Economists, experts, analysists…. They’re all the same.

Enough of them predict equally diverse and varied outcomes and generally one of them has a decent chance of predicting spot on.

I guess they just hope they are that person.