I personally just think most analysts are bullshitters. - They usually only give Buy or Hold recommendations, because they don't want to lose their contacts at the companies IR-team. - The number of times I see a stock move from 50 to 70 and the analyst moves their target from 40 to 60 with a buy rating flabbergasts me. - Same goes for when an analyst has a buy rating, stock goes from 80 to 30... then changes to hold.... stock drop further into bankruptcy... still hold... If they have no money on the line... it's all blablablah
True, but they are both Bullshitters! An analyst works on a fixed salary, liaisons with IR-team/CFO of companies and generally wants to keep a good relationship with them. Writes lengthy quarterly reports on company specifics/broader business trends. A broker works mainly for bonuses and commissions. Talks to banks and private clients, does some short term analysis and tries to sell as much stock to whoever to get as much comm as possible. Drinks a lot, smokes a lot, doesn't sleep a lot... and therefore has a tendency to go to the toilet a lot for the white powder... Both talk a lot of bullshit... but at least the brokers are fun...
Here's some unsolicited advice that applies to any question you might have: Get rid of that God awful picture.
That's like being a fatty and walking out on the beach in a Speedo. Just because you can, doesn't mean you should. Now if we were talking about having an arm, then yes any arm (provided I don't already have 2) is better than none.
I think you have an idealized picture of a broker that, like Norman Rockwell paintings (or in this case a reverse Norman Rockwell), may never have existed and certainly doesn't exist now. A broker takes orders from customers and executes them. That is all. They don't do any analysis or talk to banks unless those banks are potential or existing clients who are buying or selling securities. No one calls their broker up and asks "what's a better stock, Kodak or Xerox?" in this day and age and certainly an actual broker isn't cold calling clients pushing their favorite stock. It sounds like you're thinking about financial planners or wealth management, which again are worlds away from being brokers. In fact since the vast majority of orders are entered electronically directly by customers, most stock brokers these days sit around answering the phone all day hand holding older customers who can't manage to open a web browser and log into their account. The only place they provide real value today are with complex large orders or in illiquid commodities like lumber, shipping, uranium... Which requires deep industry knowledge and contacts but not drinking, smoking, or blow.
I'd mostly agree with your analysis of sell side analyst, but the OP was describing buy side. A hedge fund isn't going to staff an analyst group if they're not providing accurate information that the fund is acting on.