Equity analysts who talk up their brilliance online are the ones most likely to get things wrong, but they get promoted anyway.
A recent study, Empty Vessels Make the Most Noise, finds LinkedIn’s loudest financial voices are often the least reliable. People who talk big perform poorly; profiles bloated with upbeat, self-congratulatory language are associated with poorer forecasts.
This isn’t mere overconfidence. The researchers say the high tone reflects deliberate impression management, a way for less able analysts to stay visible in a crowded market.
Depressingly, the tactic works. Despite their weak records, such analysts are promoted fastest, moving to larger firms while quieter, more competent peers stay put.
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Investors, too, are susceptible. When these expressive analysts issue bullish calls, share prices jump. It’s a smaller-scale Mad Money effect, a la Jim Cramer, where enthusiasm briefly overwhelms reason.
The price distortion fades within months. The study’s advice to employers and investors is simple: actions speak louder than words, so judge professionals by their record, not rhetoric.
Still, the incentives are clear: in today’s attention economy, visibility pays better than veracity.
