And not all purported experts are even experts (no surprises here, I'm sure).
I don't know anything about the analyst referenced in the article, but there are two factors contributing to these types of prediction errors.
1. Most analysts don't have prior industry experience in their field before becoming an analyst. Although they (usually) pick up enough as they go along to understand the terms and major issues, they have little depth and are unable to reason from first principles. I work for one of these large analyst firms and my estimate is that less than 10% of our analysts have relevant industry experience. We are not unexeptional in this.
2. Vendors invest heavily in analyst relations. While this helps to better inform the analysts, it also pushes the vendor's world view. Invites to conferences and events, access to senior execs, early access to information, etc. also help reinforce the bond between the vendor and the analyst. So, not only are analysts biased towards that which they know best, it is also harder to write something negative about a company/product where you personally know the people involved.
From what I understand, it doesn't matter so much if an analyst's forecasts are wrong, so long as they keep their bank's high-touch clients in the loop with vendors (trade commissions). Clients value this kind 'soft' information more than they would over some dodgy EPS figure.
I don't know anything about the analyst referenced in the article, but there are two factors contributing to these types of prediction errors.
1. Most analysts don't have prior industry experience in their field before becoming an analyst. Although they (usually) pick up enough as they go along to understand the terms and major issues, they have little depth and are unable to reason from first principles. I work for one of these large analyst firms and my estimate is that less than 10% of our analysts have relevant industry experience. We are not unexeptional in this.
2. Vendors invest heavily in analyst relations. While this helps to better inform the analysts, it also pushes the vendor's world view. Invites to conferences and events, access to senior execs, early access to information, etc. also help reinforce the bond between the vendor and the analyst. So, not only are analysts biased towards that which they know best, it is also harder to write something negative about a company/product where you personally know the people involved.