New technology is where the action is. A lot of excitement, money, endless potential for innovation, disruption, and money. The perfect place for the Optimist to do their trade.
The Optimist gets paid for the sunshine they spread, not the forecasts of risk, negativity about companies’ downsides or alternatives that don’t support what they are advocating for. The analyst isn’t attached to the future outcomes in the way the Optimist is. The analyst is more concerned with their professional reputation.
There isn’t anything wrong with analysts being optimistic about market opportunities presented by new technology introductions or advancements. If there is a need, a means, and a viable business case then by all means, be bullish on the future.
But, optimists also never seem to the learn the lessons that the Gartner Hype Cycle teaches (https://www.linkedin.com/pulse/8-lessons-from-20-years-hype-cycles-michael-mullany/) They are reliable for getting on or in front of the next big thing, whatever that is and having a track record of issuing hockey stick/exponential forecasts and market outlooks that that ignore factors or historical frames of reference.
Red Flags:
Market reports or forecasts where everything grows and with a decided major ramp in 3 years and the market quintuples in value by year? If this happens over time you are dealing with an optimist. Hard pass if you are smart.
No negative comments or controversial takes or tries not offending anyone that might buy their stuff or they have bought in hard and won’t point out the risks?
When the quarter is down or there is a pattern of decline, do they step back from previous comments and offer new guidance or do they double down on the rebound that is coming? Do their comments resemble word salad to hide the bad news?
They produce vendor events that sell the dream vs the more objective reality of the market. The more optimism and future riches they profess the less you should trust them.
If they sell vendor advertising on their analyst platform, that is a clear sign they are not really in the analyst business. If the firm is aligned with a media outlet, be cautious as well, given the business considerations present. In addition to advertising, media platforms sell sponsored content. Pay to play isn’t good for independence.
On the other hand, if they offer paywall commentary for the good stuff then take that as a sign that there may be some objectivity possible. A buyer should be able to sort out what is there though.
If they offer advisory services, then the person or firm is most likely going to be an analyst as they must be able to push back on bad ideas or strategies or steer a client in a more beneficial direction. The optimist is far too risky to work with as an advisor as they only see the upside for vested interests or their having bought in on the vendor and industry press hype.
When you engage the Optimist, they tend to stumble, deflect or even gaslight to some extent when presented with contrarian views or are forced to explain their own when challenged. They will not own their hype tendencies.
The analyst, on the other hand, has a POV they can support and will adopt new thinking when presented with new evidence. They will continue to dig and look for ways to rebut their own analysis to make it more sound and provide value to clients and the broader market.
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