It should go without saying, but nothing below is intended as investment advice of any kind. Tobi Lutke, the CEO of Shopify, recently asked on Twitter whether there are any databases that hold Wall Street analysts accountable for their forecasts. He was likely reacting to the recent underperformance of his company’s stock after several such analysts lowered their forecasts for Shopify’s annual performance. He implied that they were misjudging, which raises a broader question: can shareholders reasonably expect accurate estimates from forecasters? It is a classic example of the principal-vs-agent dilemma: where an analyst’s (the agent) self-interest (or at least his or her employers') conflicts with the best interests of shareholders, including management (i.e., the principals).
Great writing!