Written by Shakespeare in 1606, Macbeth is based on real-life incidents from Scottish history. After receiving a prophecy that he will become Scotland's ruler, Macbeth, a Scottish general (played by Michael Fassbender, pictured, in a 2015 film version), murders King Duncan. In order to consolidate his position, Macbeth then kills Banquo, a rival. Macbeth is racked with guilt, while his wife, who had encouraged him, goes insane. Macbeth finally dies in battle.
The key moment
Macbeth and Banquo meet three witches. They tell Macbeth that he will be made Thane of Cawdor and then king. Next, they tell Banquo that while he won't becomeking, his children will. Finally, they accurately predict the manner of Macbeth's demise, albeit obliquely. The prediction about Banquo is supposedto be a reference to KingJames (descended from thereal Banquo).
Lessons for investors
Stockmarket analysts attempt to predict what will happen in the future. They often focus on corporate profits, although they can make predictions on everything from commodities to the direction of equity indices. However, unlike the witches, research analysts have a mediocre record. For example, J Randall Woolridge of Pennsylvania State University found that between 1993-2002 the average performance of all stocks tipped by the largest 15 American brokers was 0.6% lower than the overall market's. Similarly, Amy Hutton of Boston College suggests that analyst forecasts of future earnings are no better than predictions from companies' managements.
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Other uses
Even if their specific predictions are unhelpful, analysts can provide a useful overview of a company, including how it makes its money, its strategy and any key forthcoming events. The importance of analysts in providing information for investors been demonstrated by the fact that recent regulations have forced banks to "unbundle" research from other services. As a result, they have sharply cut back coverage of smaller firms. This has had the knock-on effect of making those shares much more thinly traded, and much less liquid, increasing transaction costsfor investors.
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