An article by Stephen Bartholomeusz in this morning's The Age inspired me to respond. I don't intend to share it all here - except a short note on market analysts.
Market analysts trade in "self-fulfilling prophecies". They are paid to predict whether stocks will go up or down, but as a group have more direct influence over that than anyone else. Quite weird.
Market analysts have extremely restricted access to data, but once they make comments about how a firm should behave the sharemarket will punish the firm - so often CEOs do what the market wants rather than what their own analysis says is right. A sample case is mobiles. Hutchison makes a big 15 year investment in 3G. The analysts start saying they need to acquire customers faster - so Hutch invents the capped plan. So the analysts say that Hutch will take share and everyone else is ruined - so the others follow suit to retain share. So the analysts tell everyone the mobile industry is trashed....
I'm still thinking through why firms give so little information. One is a misguided sense that it helps competitors. But I think the other is that the lack of information actually promotes the over-pricing of assets - it sets the "market premium" generally higher - which artificially inflates the cost of capital thus increasing the returns to shareholders from investment in equities. So a thesis is that the reason equity markets have been growing so fast is the decrease in "proprietor" type companies (where at least a cornerstone investor runs the company and has real knowledge of the firms economics) and the greater prevalence of "funds" all of whom are served by an uninformed market.