Frank forecasts on the world of analysts
THERE are many things in this world that need to be taken seriously. Equity analysis is not one of them. When it comes to the list of Things To Be Taken Seriously, analysts rank right down there with politicians, insurance salesmen and Canto-pop.
Analysts are completely unaware of this fact. They are still under the impression they are doing something worthwhile. This is an error.
We have recently seen the Best Broker Research awards. Lest it go to their heads, Lai See has compiled an assessment of how important analysts are.
Alan Sugar, founder of computer firm Amstrad, described analysts in the following glowing terms: 'Most of the time they talk through their backsides.' Jim Slater, founder of Slater Walker Securities in the US, described analysts as 'people who tended to have ragged raincoats and large overdrafts', while the classic stockbroking tome, Confessions Of A Stockbroker, described analysts as people who 'have trouble going to the bathroom'.
Sir Terence Conran, founder of Habitat furniture store, offered an incisive insight into the world of an analyst: 'City analysts' forecasts were too often based on suddenly finding a retailer who gave them what they wanted to buy themselves.
'Then they seize on it because they think that because they wanted it, the whole world would, and so it must be a great success - and then they turn against it in a thoroughly reptilian way.
'I've had this treatment from them, when they behave as though you've let them down, rather than admit they made a mistake.' George Adams, former chairman of clothes retailer Next, said: 'Most analysts remind me of the old bookies' runners.' The most famous comment on the unimportance of being an analyst was made by then British Chancellor of the Exchequer and honorary member of the Proud to be Stout Society, Nigel Lawson, who said: 'I would not take too much notice of teenage scribblers in the city who jump up and down in an effort to get press attention.' Steve Bell, an economist at Morgan Grenfell, hit back by saying: 'The chancellor's description of us as teenage scribblers is about as accurate as his forecast of the current account deficit - 100 per cent out.' Caught in Net MORE evidence demonstrating the kind of sad person that signs on to the Internet. We understand Xinhua (the New China News Agency) has started a company that will provide limited Internet access. An horrific thought, 1.2 billion potential spods.
Bleak future WE hear of some interesting asset shuffling going on down at everyone's favourite regulator, the Insecurity and No Future Commission, otherwise known as the SFC.
The commission's corporate finance department, which is responsible for the direct primary regulation of takeovers and mergers and the supervision of the stock exchange's listing division, has lost four of its 10 senior managers.
We hear Simon Lee, Sheila Ma, Jane Tam and Judy Vas have resigned and are working out their notice. This comes on the back of the recent resignation of Ralph Lindzon, the director of takeovers and mergers in the same department.
We are told that the disaffected staff members regard the department as a 'ship without a rudder'. We have been further informed that if Mark Dickens, a remaining senior manager, resigns, the department may have problems maintaining the high standards of regulation to which we have become accustomed.
Unsafe tips EVERY once in a while it is possible to see Hong Kong as others see it and not through the eyes of an inmate.
Such an occasion occurred when Lai See received a copy of an entry for Hong Kong in a new book which offers tips on how safe cities around the world are.
Compiled by Kroll Associates, the Hong Kong page points out there is 'occasional petty crime'. It then lists where this occasional petty crime occurs. 'On ferries, buses, trains, shopping streets, around Temple Street, Macau Ferry Pier, Tsim Sha Tsui, Wan Chai, public transport . . .' In other words, everywhere.
More worryingly, the guide notices there is a 'visible military presence on streets.' Not yet, there isn't. Not yet.