Blithering idiots, shameless liars or fallible mortals?

Poll: Are the pros
Total Votes: 27
Blithering idiots
6
Shameless liars
18
Fallible mortals who cannot compete with and refuse to partake in the collective genius of AFB
3
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    Posted: 22 April 2011 02:30 AM

    We’ve all seen Ped’s Chart showing professional analyst estimates off by $1.07 and amateur estimates off br $.01. Why are the pros always so far off?

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    Posted: 22 April 2011 02:47 AM #1

    calebcar - 22 April 2011 05:30 AM

    We’ve all seen Ped’s Chart showing professional analyst estimates off by $1.07 and amateur estimates off br $.01. Why are the pros always so far off?

    Cut ‘em some slack. The pro analysts cover many companies and true to their business models, underestimating is always better than overestimating because their clients are institutional, not individuals. Retail clients are always a low priority and analyst research is often dumbed-down for retail clients and nuances found in institutional reports are often lost. Moreover, analyst views are often communicated verbally and in a tailored manner for institutional clients and rarely communicated personally to retail clients.

    I’m sure others have some prime thoughts on sell-side and buy-side analysts.

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    Posted: 22 April 2011 02:48 AM #2

    I voted blithering idiots, but I think they’re doing it on purpose.  They KNOW Apple is going to be a lot higher than consensus… but they’d rather be cast as “conservative” than “insane”.  Conservative in finance is good.  A lot of it has to do with the fact that, to a degree, their job is on the line.  If they stick their neck out away from the “pack”... and they’re wrong… they’re really gonna get it.  They have no defense to fall back on.  By going with the herd, at least they can say “hey, I was wrong… but so was everybody else!”. 

    On the other hand, I’ve no idea what will happen to the guy from JMP Securities from DOWNGRADED Apple before earnings.  That one just seemed plain stupid.

         
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    Posted: 22 April 2011 02:53 AM #3

    They’re idiots, on purpose.  So fearful, they didn’t even approach mbeauch’s level of conservatism for the most part.

    I can understand being a little bit low.  But off by over a buck on EPS?  Can some big WS firms hire all of us right now?  OK, for covering only AAPL we’ll cut out the chauffeured sedan package and 30% of the usual salary, but we still want full benefits!  I’m throwing darts at home and getting closer than most of these “without going over” clowns.

    [ Edited: 22 April 2011 02:55 AM by Mav ]

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  • Posted: 22 April 2011 02:59 AM #4

    I agree with Eric’s assessment and think another category should be added to the poll.  Something along the lines of…

    Crafty son’s of ******* with an entirely different agenda.

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  • Posted: 22 April 2011 03:04 AM #5

    As an aside, I think the real value of what PED does is to help expose these shenanigans to the general public.

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  • Posted: 22 April 2011 03:09 AM #6

    This exercise by PED really throws out Tommo’s rationalization’s for not publishing his thoughts.  It’s quite obvious that it doesn’t influence their numbers at all.

    Three posts in a row.  I seem to be incapable of having more than one thought at a time tonight.  Hope this doesn’t signal a new trend.  :(

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  • Posted: 22 April 2011 09:30 AM #7

    BillH - 22 April 2011 06:09 AM

    This exercise by PED really throws out Tommo’s rationalization’s for not publishing his thoughts.  It’s quite obvious that it doesn’t influence their numbers at all.

    Three posts in a row.  I seem to be incapable of having more than one thought at a time tonight.  Hope this doesn’t signal a new trend.  :(

    I remember Tommo’s post and you’re right:  WS isn’t paying attention.  WS conservatism is overdone with its EPS estimates, but WS AAPL price targets are generally more reasonable (still low, however).

         
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    Posted: 22 April 2011 09:48 AM #8

    Mercel - 22 April 2011 12:30 PM
    BillH - 22 April 2011 06:09 AM

    This exercise by PED really throws out Tommo’s rationalization’s for not publishing his thoughts.  It’s quite obvious that it doesn’t influence their numbers at all.

    Three posts in a row.  I seem to be incapable of having more than one thought at a time tonight.  Hope this doesn’t signal a new trend.  :(

    I remember Tommo’s post and you’re right:  WS isn’t paying attention.  WS conservatism is overdone with its EPS estimates, but WS AAPL price targets are generally more reasonable (still low, however).

    It’ll be interesting to see if the gap between us and them continues to widen. Secondly, AFB does influence the Whisper number, they’re certainly not getting it from WS.

    If I was a smart WS analyst I wouldn’t even waste my time researching AAPL, I would just take the AFB #, lop 5% off and I would look like a genius and still be conservative. Just like PO’s guidance#. easy peesy lemon squeezy!

         
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    Posted: 22 April 2011 01:18 PM #9

    BillH - 22 April 2011 05:59 AM

    I agree with Eric’s assessment and think another category should be added to the poll.  Something along the lines of…

    Crafty son’s of ******* with an entirely different agenda.


    +1

    They sandbag deliberately.

         
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    Posted: 22 April 2011 01:23 PM #10

    While there are more than a couple ‘blithering idiots’ in this group the VAST majority are just plain old fashioned ‘shameless liars’. These “pros” are beholding to their masters and the masters don’t understand/like Apple.

    Apple is target #1 for WS and the financial academics. If you’re going to “invest” in aapl you best get used to further crushing of the trailing PE.

      cheers
        JohnG

         
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    Posted: 22 April 2011 01:30 PM #11

    johnG - 22 April 2011 04:23 PM

    While there are more than a couple ‘blithering idiots’ in this group the VAST majority are just plain old fashioned ‘shameless liars’. These “pros” are beholding to their masters and the masters don’t understand/like Apple.

    Apple is target #1 for WS and the financial academics. If you’re going to “invest” in aapl you best get used to further crushing of the trailing PE.

      cheers
        JohnG

    Going to be hard to crush the P/E much further. I am going to have to respectfully disagree with you on this. I still feel that once we get past May 2nd we will see a (19/20) p/e in a relatively short fashion. The only real solution is a stock split, but I maintain that that is not even discussed at Apple headquarters, I will leave at that since it is a huge issue with me. Apple did surprise me this qtr with the share dilution amount.

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    Posted: 22 April 2011 01:33 PM #12

    johnG - 22 April 2011 04:23 PM

    While there are more than a couple ‘blithering idiots’ in this group the VAST majority are just plain old fashioned ‘shameless liars’. These “pros” are beholding to their masters and the masters don’t understand/like Apple.

    Apple is target #1 for WS and the financial academics. If you’re going to “invest” in aapl you best get used to further crushing of the trailing PE.

      cheers
        JohnG


    Oh, I don’t know if it’s because they don’t “understand/like” Apple.  I would venture it’s because they make money on the volatility…in *either* direction…they profit on the way up AND down.

         
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    Posted: 22 April 2011 02:01 PM #13

    mbeauch - 22 April 2011 04:30 PM
    johnG - 22 April 2011 04:23 PM

    While there are more than a couple ‘blithering idiots’ in this group the VAST majority are just plain old fashioned ‘shameless liars’. These “pros” are beholding to their masters and the masters don’t understand/like Apple.

    Apple is target #1 for WS and the financial academics. If you’re going to “invest” in aapl you best get used to further crushing of the trailing PE.

      cheers
        JohnG

    Going to be hard to crush the P/E much further. I am going to have to respectfully disagree with you on this. I still feel that once we get past May 2nd we will see a (19/20) p/e in a relatively short fashion. The only real solution is a stock split, but I maintain that that is not even discussed at Apple headquarters, I will leave at that since it is a huge issue with me. Apple did surprise me this qtr with the share dilution amount.

    I’ll be happy if we get and stay above 18 soon. It has only been one day, but right now P/E is under 17.

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    Posted: 22 April 2011 06:16 PM #14

    Apple, you know as well as anyone that it is in all of our best interests if it makes good steps and not leaps forward. The last thing we need is another gap to have to worry about going forward.  AAPL closing close to 350 should not have come as a surprise to anyone. I had forgotten all about it being a short trading week and the Wed announcement really messed me up on where I thought we would be on Friday. My guess is that the last action in AAPL was all option related. I was not following, but I would bet that the LEAPS did not move that much down relative to 352/3 ish. Of course they moved down from the 355 level. I believe we could see 375ish in 2 weeks. JMO of course. :innocent:

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  • Posted: 22 April 2011 06:54 PM #15

    These “sell side analysts” also have investment banks behind them which try to sell services (new shares, share buybacks, IPO’s etc)  Many a time we’ve seen companies getting angry at analyst for overestimating ( so company doesn’t meet) and then when the time comes to spend money on investments company goes: GS?, Morgan? are these the guys who ruined our stock last year? Are these the guys who downgraded us to sell?  Did you notice that no stock is a ” sell ” at any time? it’s always buy or hold. Lots of politics. Having said that, they could miss by less .. 25% is just crazy.