The Equity Analyst's Curse: Remembering Everything

Jorge Luis Borges published a story in 1942 called "Funes the Memorious." It runs about ten pages, and it has bothered me for most of my career.

The narrator meets a boy in rural Uruguay named Ireneo Funes who, after being thrown from a horse, finds that he can no longer forget anything. Not "anything important." Anything. Funes remembers the exact shape of every cloud he has ever seen. He remembers the precise grain of a piece of leather he handled years earlier, and the specific pattern of foam on a particular wave on a particular afternoon. His memory is total and perfect.

It sounds like a gift. Borges makes very clear it isn't.

Funes, he writes, was "almost incapable of general, Platonic ideas." The boy couldn't understand why the word "dog" referred to the animal he'd seen in profile at 3:14 and also the animal he'd seen face-on at 3:15. To him those were obviously different creatures. Every moment was its own universe, demanding its own vocabulary. Borges drops the punchline almost as an aside: "To think is to forget differences, to generalize, to abstract."

I think about that line every time I open a research note and find an analyst who has clearly lost this particular war.

You know the ones I mean. The notes where every data point is present. Every footnote has been chased, every transcript has been tagged, every sell-through survey has been cited. The author has visibly done the work. And yet somewhere around page nine you realize you still don't know what they actually think. There is no shape to it. The details are all there and the view is all absent.

Equity research is, in some ways, a factory built to turn people into Funes. The inputs never stop. Filings, amended filings, channel checks, management meetings, sell-side notes, expert call transcripts, alternative data feeds, social sentiment, competitor earnings, regulatory filings in jurisdictions you barely knew existed. Modern tooling has only made the problem worse. A capable junior with a Bloomberg terminal can catalog more facts about a business in a week than a whole team could manage in a month when I started.

And the business rewards this, right up until the point it doesn't. Your first few years as an analyst are spent proving you've read the thing, and then read it again. Comprehensiveness is the ticket you buy to sit at the table. The twist, which nobody warns you about, is that the same skill that got you the seat will keep you from ever doing anything useful in it. At some point someone is going to ask you what you think, and "everything" is not an answer to that question.

The analysts I've watched become genuinely good all learned, at some point, to forget on purpose. They read the 10-K and then they close it and ask themselves what, of all of that, actually moves the stock. They sit through the two-hour earnings call and write down three sentences. They are, in Borges's terms, actively throwing things away, and the throwing is the work. It looks, from the outside, like laziness or overconfidence. It's neither. It's the only way anyone has ever built a view out of an ocean of information.

Funes couldn't do that. He drowned in his own memory, Borges tells us, at nineteen. It may be the saddest story he ever wrote. It's also the one I'd hand to every associate on their first day.