Question

The academic literature seems to suggest that sell-side analysts are biased.

a) What is the nature of this bias? What exactly is biased?

b) What factors does this literature attribute these biases to?

c) If we buy into the story of analyst bias, should we stop listening to analysts? Why, or why not?

Answer 1

a) Bais is a person or group compared with other usually in a way considered as a unfair.In science and Engineering a bias is a systematic error. Statastical bias results from unfair sampling of a population or an estimation process that does not give accurate results on average.

b)Bias is a tendency to lean in certain direction often to the detriment of an open mind.

Bias prejudice means a strong inclination of the mind or preconceived opinion about something or someone.

A bias may be favourable or unfavourable, bias in favour of or against an idea.