Analysts are often influenced by groupthink and consensus from "summary" of Contrarian Investment Strategies in the Next Generation by David Dreman
When it comes to analyzing investment opportunities, analysts are frequently swayed by the prevailing groupthink and consensus. This tendency can lead to a lack of independent thinking and a herd mentality among analysts, resulting in a consensus that may not necessarily be accurate or reflective of the true value of an investment. Groupthink occurs when individuals prioritize harmony and conformity within a group over critical evaluation and independent thought. In the world of investment analysis, this can manifest as analysts relying on widely-held beliefs or market trends rather than conducting their own thorough research and analysis. Consequently, analysts may be hesitant to deviate from the consensus view for fear of being ostracized or going against the grain. This fear of standing out or being wrong can lea...
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