RD however, they are confused by it, and they can't quantify it. The is this: in 36 interviews of securities analysts with major brokerage and independent research firms over a period of three months, could not find a single analyst who said he had ever made a buy/hold/sell recommendation on the basis of RD but can't recall a situation where R&D has had an impact on per-share Even in the case of pharmaceuticals -- so dependent on the technical creativity of their R&D departments --industry analysts talked in terms of marketing, not R&D, although they all acknowledged that these are research-driven companies. The major exception was genetic engineering companies. Many analysts -- such as Fred Greenberg, a partner with EGS Partners, in New York City -- cited the fact that positive recommendations for these companies have been largely based on R&D. Although securities analysts are surely one of America's most inaccessible clans, most of the analysts that agreed to extensive interviews were surprisingly candid. Most held key positions in their firm's research departments, and were either members of the New York Society of Securities Analysts, Registered Representatives, or both. Seven were chemical or chemical specialties industry analysts, six were pharmaceutical industry analysts, four specialized in electronics, three watched computer companies, four focused on biotechnology companies, three studied the aerospace industry, and another three tracked oil and gas. Other analysts observed telecommunications companies, food and tobacco, machinery, publishing, household and personal products. Three admitted only to watching high tech companies. The median number of years employed as an analyst was six, with a similar median for the number of years in their specific positions. Less than 10 percent had technical degrees. To understand analysts, one must appreciate their role from the buyer's point of view. Analysts are paid to predict the future of the companies they watch so that their constituencies -- other members of their firm, institutional money managers and individual investors, investment bankers, corporate financial officers and treasurers, and other members of the financial community -- can optimize their investment strategies. While the bottom line of their calculations is usually a prediction of the next quarter's earnings, they also supply additional information so that their recommendations can be rationalized. (This article does not discuss the attitudes of investment banking analysts because their primary role is to analyze companies for the purposes of financing acquisitions or sale.) Wolfgang H. Demisch, managing director of UBS Securities and an aerospace industry specialist, sets forth the case for most analysts of technically oriented manufacturers: I personally think that the accusations that analysts think only about R&D that is going to result in higher profits within the next quarter or two is hogwash. The biotech industry, where there isn't a nickel in earnings, shows that those companies are being valued at something much more than their earnings. …