Every Apple (NASDAQ:AAPL) investor is conditioned to expect a wild ride during Apple earnings calls. Because no one knows what to expect, you can’t put any faith in analysts’ prognostications; they almost always miss, and usually to the down-side. Yet every Apple quarterly earnings conference call follows the same pattern. Apple reports great numbers, the world goes nuts, shares skyrocket; then an Apple executive will invariably make a bearish remark, the world’s collective jaws drop, sparking an equally volatile selloff. It’s an emotional roller coaster.
After the call, the analysts run for cover, spinning into CYA mode, performing poetic revisionist interpretations of their prognostications, in an attempt save face. I’ll have to admit though, Apple is tight lipped, and it must be difficult to collect and analyze all the required information. But you would think that analysts and their deep pocketed firms, with the tremendous resources and contacts at their disposal, could do a better job providing guidance to the rest of us.
Why do we pay such credence to these professional analysts when they are so consistently wrong? I’m really tired of hearing quotes like, “much better than analysts expected,” or “analysts missed the boat.” You hardly ever hear a report like, “man the analysts nailed that one.” So, I have to ask the question, do we really need these professional analysts, especially when we have in our midst, a few very talented, independent Apple enthusiast that provide comprehensive and accurate earnings analysis for FREE?
Recently, Andy Zaky of the Bullish Cross Blog made the news with his excellent Apple Q3 earnings report. His report was recently featured on Seeking Alpha and mentioned on Ken Ray’s Mac OS Ken podcast. Andy provided a comprehensive treatise, taking into consideration a wide range of data points, market conditions, readily available public information, and intelligent and insightful analysis. Andy is usually on the bullish side, but his analysis is as good as any of the “professional” analysts. And Andy isn’t a spin-meister.
Then we have Deagol, a member of the MacObserver Apple Financial Board. Deagol’s analysis is remarkably accurate and comprehensive. It’s absolutely amazing the depth that he provides, not only for this fiscal quarter, but his past work and future guidance as well. You can find his research and analysis on StashBox. You can also search his name on AFB and find an excellent debate of the facts, figures between Deagol’s and other AFB members.
So, with analysts in the Wilderness like Andy and Deagol, who needs these so-called professionals? Quite frankly, I’ve had it up to here with some of these pros, because their personal biases and their employer agendas seem to taint there reporting. I believe analysts have way too much power, and go unchecked, with many people’s fortunes tied to their missteps. I propose a rating system for these “pro” analysts, and a special widget, so that every time they appear on the web, you should be able to hover over them or their work and get their handicap.
Disclosure: I hold a core position with AAPL. Although sometimes it's bigger, sometimes I pare it down based on market conditions.