Loud analysts on LinkedIn are often wrong but are rewarded anyway – The Irish Times

Equity analysts who talk up their brilliance online are the ones most likely to get things wrong, but they get promoted anyway. A recent study, Empty Vessels Make the Most Noise, finds LinkedIn’s loudest financial voices are often the least reliable. People who talk big perform poorly; profiles bloated with upbeat, self-congratulatory language are associated with poorer forecasts. This isn’t mere overconfidence. The researchers say the high tone reflects deliberate impression management, a way for less able analysts to stay visible in a crowded market. Depressingly, the tactic works. Despite their weak records, such analysts are promoted fastest, moving to larger firms while quieter, more competent peers stay put. READ MORE Investors, too, are susceptible. When these expressive analysts issue bullish calls, share prices jump. It’s a smaller-scale Mad Money effect, a la Jim Cramer, where enthusiasm briefly overwhelms reason. The price distortion fades within months. The study’s advice to employers and investors is simple: actions speak louder than words, so judge professionals by their record, not rhetoric. Still, the incentives are clear: in today’s attention economy, visibility pays better than veracity.
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