Pro analysts: mediocrity has become a habit

Horace Dediu is just amazing. He's so much more fun to read than all my dreary number-filled tables. Go read his "existential theory" of asymco. A true "entertainer," indeed.

Yesterday he responded to the analysts quoted in the 'underdogs' Bloomberg piece about us. Horace nails it (emphasis mine):

[...] I was glad to see that Adam Satariano’s well-written piece finally got some reactions from the professionals [...] However, neither answer satisfies.

Wu cites regulation and scrutiny but that does not prevent one from being intellectually honest. What matters is not avoidance of conservatism or exuberance. What matters is rigor; being impartial to everything but the data. One must keep one’s convictions in proportion to one’s valid evidence not to regulatory oversight (which is there to prevent abuse, not balance).

Peterc cites pressure from clients (hence the obligations of employment). That implies that professionals are under pressure to say something other than what they believe, which is a sinister form of self-censorship. Not only is that less valuable as an opinion, but it’s likely to be less accurate as well.

Horace's warning to professional analysts, as highlighted by PED, is that their biggest issue is that their "profession" risks becoming de-professionalized. Which crashes into the old existential question about what is professionalism:

The difference between professionalism and amateurism isn’t whether one is well paid or not or whether one is anointed with credentials. It’s whether one is consistently out-performing randomness (note emphasis on the consistency).

When I heard Tim Cook paraphrase the "excellence is habit" quote, I first thought it was from Aristotle. Wikiquotes says no, it's a misattribution actually coming from a commentator to Aristotle. Anyway, here's the real quote from Aristotle's Nicomachean Ethics:

It is well said, then, that it is by doing just acts that the just man is produced, and by doing temperate acts the temperate man; without doing these no one would have even a prospect of becoming good. But most people do not do these, but take refuge in theory and think they are being philosophers and will become good in this way, behaving somewhat like patients who listen attentively to their doctors, but do none of the things they are ordered to do.

Sounds just like pro analysts, no wonder they don't "get" Apple: It's become a (bad?) habit for them. Was Cook perhaps sending them a hint?

Bloomberg: Apple's `Underdog' Analysts Outperform Wall Street From Helsinki, Caracas

Asymco: A new era in financial analysis is dawning

PED: Apple analysts: Who's getting better, who's getting worse

Even CNBC: Apple: Analysts vs. Bloggers (video)

See also (with some flawed assumptions IMO) Pragmatic Capitalism: APPLE MAKES A MOCKERY OF THE SYSTEM – AGAIN…. (apologies for shouting it, but I shouldn't change the author's title).