The Death of the Analyst: Why “Buy, Sell, or Hold” No Longer Matters
For decades, the sell-side analyst was a market hero. Their notes could and did move markets, their calls were quoted in the press, and their proximity to CEOs made them seem like gatekeepers of secret knowledge. That age is over.
The world has changed with AI-driven data, real-time news flow, and algorithmic markets; the analyst is not a “buy,” a “hold,” or even a “sell.” They are irrelevant. This is an opinion I have long held, courtesy of my years watching them from the right side of the trading desk and my decades tracking their woeful performance. If you were following advice from analysts, you are probably living in a cardboard box under a bridge somewhere.
Today, the Australian Financial Review published an article titled – Are equity analysts a buy, a hold or a sell?
You won’t win any prizes for guessing my response. My reasons are listed below –
1. The Collapse of Influence
For decades, an analyst’s rating could swing a stock. Today, as even the AFR concedes, a slapped-on “buy” or “sell” rarely moves the dial. Today, research is commoditised, diluted by regulation, and stripped of the mystique that once gave it power.
2. A Track Record of Failure
The numbers are damning. Decades of studies show analyst forecasts are biased upward, herd-like, and lagging the market. In the article, Angus Aitken put it bluntly: “99 per cent of analysts add zero value”. The reality? Analysts rarely beat consensus, and when they do, it’s luck dressed up as insight.
3. Information Asymmetry Is Dead
Once, analysts thrived on privileged access to company information. That moat has evaporated.
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AI parses earnings reports, filings, and transcripts in seconds. I asked an AI agent to pretend it was a financial analyst and to generate a report for me on WBC. It even expressed an opinion as to whether WBC was a buy or sell. As a piece of marketing fluff, the ikes of which are produced by analysts, it was indistinguishable from the real thing.
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Retail investors now have dashboards that rival institutional research.
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Index funds and quant shops dominate flows, making individual stock calls almost irrelevant.
When everyone has real-time information, the old gatekeepers have no gates to guard.
4. Relationships Are Not Research
Today’s analysts cling to the notion that their actual value lies in “relationships.” Corporate access, conference invitations, whispered management insights. But this is not research — it’s marketing theatre. Investors don’t need a chummy lunch with a CEO when AI-driven expert networks, satellite data, and alternative feeds offer richer, unbiased insights.
Sucking up to CEO’s does not add value to the average investor.
5. AI Eats Their Lunch
The industry itself knows what’s coming. UBS is already sending AI-generated analyst avatars to clients. Generative tools can write notes, run models, and spit out thematic insights faster and cheaper than armies of junior associates. If the “value” of an analyst is a 40-page PDF and a conference invite, the machines already do it better.
6. Narrative Maintenance, Not Truth
Perhaps the most damning indictment: analysts are not in the business of truth. They rarely issue “sell” calls, avoid offending corporates, and cluster around consensus. Their function is to maintain narratives and relationships, not to generate alpha.
The Verdict
The modern investor has moved on. Hedge funds run their own models. Quants exploit signals analysts can’t see. Retail investors have AI copilots that put Wall Street’s “research” to shame.
Equity analysts are not a buy. They’re not a hold. They’re not even a sell.
They are irrelevant.
