Measuring the Analyst’s Performance

THIS ARTICLE develops a scoring system to measure the performance of individual security analysts or entire groups of analysts. This system expresses results on a scale ranging from 0-100 within which a score of 50 represents achievement at a random selection level. In the development of methodology, an effort is made to determine price performance dispersion characteristics within groups of diversified stock issues. This is relevant to the structure of any set of relative market value judgments as it is to any system that attempts to evaluate the relative accuracy of such judgments. It concludes with a warning that unless security analysts develop their own performance measurement approaches, they are likely to have them imposed by those outside the profession.