Sarmad,
My main objection to your version of this matter is that it all sounds so deliberate and conspiratorial. There are thousands of financial analysts employed by over fifty sell side institutions. Are you saying all are engaged in this fraudulent conspiracy to manipulate securities prices for the benefit of their firms? That would be one of the biggest criminal conspiracies ever. How could they get away with it? Billions of dollars are involved. Companies, investors, and state attorneys general would certainly interfere, let alone class action attorneys. The reputation effect would prevent anyone from believing them and their high paying jobs would eventually be lost.
Instead of your strong-form conspiracy theory, I am more inclined to believe it is a combination of the three blind men describing the elephant combined with ethical lapses that are rooted in certain intrinsic institutional conflicts of interest and bias. In combination, these factors are enough to create certain cross-currents of opinion that may distort reality, but this type of ambiguity is inherent in the functioning of speculative markets since time immemorial. It is the job of the speculator to sort out the wheat from the chaff through superior understanding of the company and the relevant influences affecting supply and demand for company shares.
The instances you cite, such as Mark Miller saying WDC cannot produce heads are too simplified to be useful as evidence, in my view. If this is what he actually said, it would be characterized as a statement of opinion, not a fact. My recollection was that he basically said the RDRT acquisition was risky, not that it had no chance of success. Not sure about the yield issue. My impression is that yields are carefully guarded company secrets. WDC could certainly have rebutted Mark Miller's statement if it wished to do so. In fact, I wonder why senior management would not be most concerned of all if the analysts are as deceitful as you suggest, since they have much more at stake than almost anyone else.
It seems to me that WDC is a pretty special case. In the "normal" situation, analysts are institutionally muzzled from criticizing the companies they cover out of fear of losing access and lucrative potential corporate finance arrangements for their firms. Hence the development of polite code words such as hold to mean sell and interest in Henry Blodgett's private e-mail. The idea of the analyst as outspoken critic seems to me to be a rather new phenomenon, and potentially an encouraging development to balance out the traditional cheerleader role.
I tend to feel that all of us develop biases, especially speculators. You are quick to complain about what appear to you to be bearish distortions of the truth because you have a significant amount of money at stake on the bullish proposition. I am merely positing that there are probably even more bullish distortions at play, Sarmad, and that conspiracy theories are a bit too pat and simplistic for someone of your intelligence and savvy.
JMHO,
Sam |
