From the Graham
and Doddsville Newsletter - Spring 2012, in response to a question about mistakes analysts make:
“One of the biggest things I see quite often is getting too
close to management. We never meet with management. For all of the bad
asymmetries of being on the short side, one of the good asymmetries is that we
don’t rely on the company. We can get information from the company if we want
to, as we can go through the sellside. Those that are long the stock and are
close to the company almost never hear the negative side in any detail. The biggest
mistake people make is to be co-opted by management. The CFO will always have
an answer for you as to why a certain number that looks odd really is normal,
and why some development that looks negative is actually positive.” –Jim Chanos