What Are Analysts Good For?

“In the absence of theoretical and empirical justifications, analysts base their work on what they refer to as ‘market feeling’ 
– a technique that builds of affect, tacit knowledge, and experience – to make sense of market developments."

From Economic Sociology and Political Economy, March 24, 2018:

Market Forecasting: A Sensitive Practice at the Heart of Neoliberal Capitalism

Since the emergence of modern financial markets, financial analysts have played a critical role in producing visions of “the economy” and its future development. As experts, they analyze market developments and predict future scenarios that enable other financial market participants to speculate on the rise or fall of stock prices, the success or failure of particular investment products, and the growth or decline of entire national economies. The substance of the analysts’ valuation and forecasting practices is, however, heavily disputed among economists. In neoclassical economic theory, the assumption that markets are informationally efficient has challenged the legitimacy of the work of financial analysts since the establishment of the efficient market hypothesis as a central paradigm in the mid 1960s. Alternative schools of thoughts – such as new institutional or behavioral economics – have criticized this paradigm. However, they have also argued that the degree of uncertainty, which is inherent to financial markets, makes prediction impossible.

Empirically, this critique has been around even longer. In 1933, economist Alfred Cowles published an article that tested the attempt to forecast stock market prices. After having analyzed thousands of stock market predictions from 16 financial service agencies, Cowles came to the conclusion that “[s]tatistical tests of the best individual records failed to demonstrate that they exhibited skill, and indicated that they more probably were results of chance.” Such results have been confirmed repeatedly. In the UK in 2012, for example, Orlando, a ginger cat that tapped over the pages of the Financial Times to select stocks, outperformed a group of financial professionals.

The lack of justification of the forecasting practices financial analysts deploy brings up an important question: Why do financial analysts exist at all? How do they manage to maintain their role as experts in the market? And how they cope with the uncertainty and lack of theoretical and empirical foundations of their practices?

In the first weeks of my fieldwork, a financial analyst who coached me, told me how I could learn to do financial analysis. He advised me to take some time getting a “feeling” for how markets work. “This takes a lot of time,” he explained, “but basically, you just have to observe the market and read financial newspapers and the reports of other analysts.” The analyst then stared off into space, groping for words. After a while, he said, “You know, it’s not just about observing and reading, it’s about…” He did not finish his sentence since he could not put into words how one should develop that feeling for the market he was talking about. “You know, it’s about…,” he made a gesture as if he was touching a very smooth fabric to check whether it was made of silk. “That feeling,” he continued, “is what differentiates a good analyst from a bad one. ...MORE

I almost linked to the bolded 'paper' in the earlier "Robert J. Shiller: 'Was the Stock-Market Boom Predictable?'". The link above goes to the gated version at The Econometric Society, here's the ungated at Yale's Cowles Foundation for Research in Economics, maintained by Prof. Shiller, which has graced our pages a few times:
"Can Stock Market Forecasters Forecast?" is the title of a paper by one of my heroes, Alfred Cowles III.

It appeared in Vol.1, No. 3 of Econometrica, after having been read to a joint meeting of the Econometric Society and the American Statistical Society.

Mr. Cowles answer to the question?

It is Doubtful