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If you see companies as a force-of-nature that can only be marginally influenced by humans, then you're right that the only variable is the analyst's prediction

by whack 7y ago

If you see companies as a force-of-nature that can only be marginally influenced by humans, then you're right that the only variable is the analyst's prediction accuracy. But if you see companies as organizations made up of humans, that are capable of both overperforming and underperforming, then you have multiple variables. An analyst could provide an estimate for future-sales, and this estimate could be the best possible estimate given the information known at the time. And the estimate could still be wrong because the company's leadership/workers succeeded in turning things around. TLDR: If you believe in free-will, then it's possible for someone to beat highly-accurate 3rd party estimates. If you don't believe in free-will, then any mis-estimates are purely due to analyst error

jodrellblank 7y ago
TLDR: If you believe in free-will, then it's possible for someone to beat highly-accurate 3rd party estimates. How can you call them "highly-accurate" if they aren't accurate? Yes they can be "best available, given the information known", but we're talking about predicting the future - it's impossible to have all the information; if your prediction is wrong, you don't get to call it "accurate". If you don't believe in free-will, then any mis-estimates are purely due to analyst error That doesn't make it analyst /error/. It tells you the analysts' understanding of Tesla as is not as good as they thought. If they had predicted the result spot-on, they would be excellent analysts working with excellent information. They didn't, so now you know one or both of those is not excellent, or both, or they made errors. If you see companies as a force-of-nature that can only be marginally influenced by humans To go down this route, you have to imagine Tesla didn't really want to produce many cars at all - all the incentives and motivation they have about making lots of cars, earning millions, paying debt back, the incentives employees have for bonuses, doing what the boss says, staying employed, all amount to virtually nothing, but the commentary from Jones of SomeBank is enormously influential and can turn the entire company round. That's so disproportionate, I can't just take it as given.
- whack 7y ago
  You're squabbling over semantics and ignoring the larger point. Someone can put together the best-possible estimate today based on all the information available. And this estimate could still be wrong, through no fault of the analyst, because of human free will. This makes stock-analyst estimates fundamentally different from weather predictions.
  - jodrellblank 7y ago
    Why does it? You could put together the best-possible weather prediction today based on all the information available, and this estimate could still be wrong, through no fault of the meterorologist. And what we'd learn is that the meteorologist cannot predict the weather and we shouldn't rely on their predictions as much in future. We don't call the meteorologist "accurate" because they couldn't do better, we call them "inaccurate" because they were inaccurate.
    - whack 7y ago
      The fact that "weather" has no free will, but humans do, makes your analogy unworkable. If a meteorologist has all available information at time-T, as well as the computing power to crunch all the numbers and run a simulation, it's impossible for them to mispredict the weather. The very definition of free-will means that the above is impossible for predicting human behavior. Even if you had perfect information, models and computing power, you still can't predict human behavior with 100% accuracy. A good analyst may be able to predict human behavior with higher levels of accuracy than others - but even a perfect analyst with perfect information will still make mistakes due to free will, which makes it qualitatively different compared to a meteorologist.

by whack 7y ago

jodrellblank 7y ago

TLDR: If you believe in free-will, then it's possible for someone to beat highly-accurate 3rd party estimates. How can you call them "highly-accurate" if they aren't accurate? Yes they can be "best available, given the information known", but we're talking about predicting the future - it's impossible to have all the information; if your prediction is wrong, you don't get to call it "accurate". If you don't believe in free-will, then any mis-estimates are purely due to analyst error That doesn't make it analyst /error/. It tells you the analysts' understanding of Tesla as is not as good as they thought. If they had predicted the result spot-on, they would be excellent analysts working with excellent information. They didn't, so now you know one or both of those is not excellent, or both, or they made errors. If you see companies as a force-of-nature that can only be marginally influenced by humans To go down this route, you have to imagine Tesla didn't really want to produce many cars at all - all the incentives and motivation they have about making lots of cars, earning millions, paying debt back, the incentives employees have for bonuses, doing what the boss says, staying employed, all amount to virtually nothing, but the commentary from Jones of SomeBank is enormously influential and can turn the entire company round. That's so disproportionate, I can't just take it as given.

whack 7y ago
You're squabbling over semantics and ignoring the larger point. Someone can put together the best-possible estimate today based on all the information available. And this estimate could still be wrong, through no fault of the analyst, because of human free will. This makes stock-analyst estimates fundamentally different from weather predictions.
- jodrellblank 7y ago
  Why does it? You could put together the best-possible weather prediction today based on all the information available, and this estimate could still be wrong, through no fault of the meterorologist. And what we'd learn is that the meteorologist cannot predict the weather and we shouldn't rely on their predictions as much in future. We don't call the meteorologist "accurate" because they couldn't do better, we call them "inaccurate" because they were inaccurate.
  - whack 7y ago
    The fact that "weather" has no free will, but humans do, makes your analogy unworkable. If a meteorologist has all available information at time-T, as well as the computing power to crunch all the numbers and run a simulation, it's impossible for them to mispredict the weather. The very definition of free-will means that the above is impossible for predicting human behavior. Even if you had perfect information, models and computing power, you still can't predict human behavior with 100% accuracy. A good analyst may be able to predict human behavior with higher levels of accuracy than others - but even a perfect analyst with perfect information will still make mistakes due to free will, which makes it qualitatively different compared to a meteorologist.