Why J.P. Morgan fund managers hunt down brave analysts

"Herding is the [behavioural finance] concept that all of us are comfortable in a pack," JPMAM head of the Dynamic fund range team Jon Ingram told delegates at a Morningstar conference. "Herding is the reason analysts are unlikely to go out on a limb too far when it comes to earnings predictions. Because if they are drastically wrong, the negative consequences - such as losing their job - far outweigh the positives if they are significantly right - such as a bonus." That's why if an analyst thinks he sees something in a company which means its earnings could be much higher than the co...