Exposing the Analysts
From America's Network magazine....I'd rate this as a "must read".
Steve
Exposing the Analysts
AN's investigator uncovers a seedy industry rife with faulty research and conflicts of interest.
When times are good and everybody is making money, nobody cares that the happy stories are nonsense. But when the market goes sour, then they start pointing the finger at the firms. It’s like that now.”
The speaker is “Radiohead,” and the reference is to telecommunications analyst firms, that vast legion of seers and mountebanks in the business of prophecy for hire, or, to substitute their own favorite designation for their work, “strategic analysis.” Radiohead was once a member of such a firm, albeit a small one. Simultaneously, he was a trade journalist — an obvious conflict of interest, but then, as we shall see, conflicts of interest are endemic in this dusty corner of the industry. Before that Radiohead was an RF engineer, and now he’s a venture capitalist — a man who has occupied every stratum of the ecosystem encompassing the firms and their hosts, and who has seen it all with a jaundiced eye.
Radiohead, whose further observations will figure largely in this narrative, happens to be discussing the crisis of confidence that is currently gripping the analyst industry, a crisis whose existence is confirmed by no less a luminary than Berge Ayvakian, CEO of the Yankee Group, the oldest, and one of the largest, of the major firms. “I think it’s still largely unspoken among the firms themselves,” Ayvakian remarks, “but it’s beginning to be acknowledged internally. We’re being blamed for pumping company valuations to unrealistic levels, which of course has led inevitably to the current downturn. For years we as an industry trafficked in inflated market predictions. Now we’re being held accountable for that. And,” he adds, “we should be. We’ve all sinned in this regard.”
Both speakers allude to the phenomenon
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