Hacker News Reader

Comment by mckilljoy | Hacker News Reader

As impressive as this is, it is below analyst consensus, and the stock is down 5% afterhours :-(

> As impressive as this is, it is below analyst consensus, and the stock is down 5% afterhours :-(

This happens every time. Apple exceeds their own guidance; grows at a rate faster than nearly anyone else in the Fortune 500, and yet still fall short of the (insane) analyst guesses (predictions would be unsuitable).

I believe Horace Dediu did an article some time ago on amateur vs professional analysts and their track records against Apple's earnings calls. I can't seem to find the link but the degree at which some were off (with regularity) would be concerning if I were paying them for the advice.

I remember that as well -- bloggers got it right, analysts got it wrong. This morning I read "somewhere on the internet" that bloggers were predicting ~$10 while analysts where predicting ~$12. If I didn't just imagine that, this would remarkable in that even the bloggers overestimated.

Here's the data for this year - it looks like it was Philip Elmer-DeWitt who may have compiled the data.

Interestingly, the independent analysts (oft. "bloggers") were much further off base as an aggregate than the institutional analysts: http://tech.fortune.cnn.com/2012/07/24/all-eyes-on-apples-ea...

This reminds me of "The Wisdom of Crowds"[1]. Could it be a case of the masses collectively being more intelligent than the so called experts?

[1] http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds

The experts are generally over-conservative for a reason. The tldr reason is that they get fired for losing people's money so absolute accuracy (where misses are 50% high and 50% low) is not their incentive.

Check out: http://www.estimize.com/

Wisdom of Crowds for earnings calls.

"fall short of the analyst guesses" every time? Not every time.

Jan 2011: "Apple turned in results that easily surpassed Street expectations" http://www.cnbc.com/id/41137612/Apple_Profit_Revenue_Outstri...

April 2012: "Apple posted quarterly results that blew past expectations" http://www.cnbc.com/id/47161478/Apple_Earnings_Surprise_Why_...

In line with Apple's guidance. Who should we trust?

Apple's guidance is incredibly conservative. I don't believe they've ever been under their guidance for years. On the other hand, they normally blow it out.

The best thing to "trust" is the market. Apple underperformed what the market was expecting. It happens once in awhile..

Reply on news.ycombinator.com