Equity Analysts: A Dying Breed?

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Hedge funds are often touted as “early adopters” of new investment methods and developing strategies for doing this super cool thing called making money. Algorithmic trading, long short (cutting edge when Alfred Jones did it), the free gift-with proxy battle giveaway. All started at hedge funds. So it stands to reason that HFs will probably be ahead of the curve when they fire all of their equity analysts, as Tanya Beder, quant industry vet and noted hater of equity analysts, thinks they ought to do. She thinks computers should replace the EAs who, through her hate-tinted glasses, aren’t pulling their weight, not to mention not doing anything that couldn’t be done by a computer.
“Given the same set of factors, it will always produce the same result,” Beder hissed today. “Its signals are pure and systematic.” She argues that the next logical step is to supplant equity analysts with machines, and soon. Beder didn’t get her all-star returns at Caxton by tying a bunch of dead weights to her payroll.
Sandy Gross is gentler with regard to the unnecessary leaches whose services are no longer required at their companies. It’s not that hedge funds necessarily want to gather up their non-performing flock, take them around back and fire a few rounds off, they have to, in order to make room for the quant “rocket scientists” for which there is a “great demand.” (Here’s a good example of the difference between hedge funds and Dealbreaker: we demand mediocrity at best.)
[Insert obligatory Ren Tech/DE Shaw chest bump here, which symbolizes the proven success of quants].
Brad Hintz, financial services analyst at AllianceBernstein, noted that “there are lots of arguments as to why equity analysts are doomed,” and even rambled off a few ("regulatory investigations into analyst conflicts, the technology stock crash.") But you probably know something that Brad doesn't. Feel free--dare we say encouraged-- to share it with us now.
Equity analysts facing new quant challenge [Reuters]

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