Very few equity investment-models, if any, are consistently accurate. Large derivative-based hedge books attest to that fact.
Why then do investors rely so heavily on research when ALL research is, in one form or another, subjectively predictive? So why bother? If the rules of the game stayed constant, then that would be a different ball-game altogether. Research would be more substantive. Investment reality, however, is a very different animal and the devil's always in the fine-print. Turn the pretty glossy document over and you'll notice in nondescript terms one important caveat. Paraphrased most claim: 'blah blah bulldust ...more blah and loads more bulldust. This research report is based on our interpretation of current circumstances only..ceteris paribus (all things being equal)... blah blah bulldust'; disclaimer, disclaimer.
Therefore, equity research interprets and forecasts a company's / sector's prospects based on current variables only, of which regulatory stability is just one of many and the most ephemeral. Take Africa for example. (..or Australia or South America or China or whatever...). Some of the world's largest mining houses have significant investments in Africa. Most of those investments generate significant ROI and constitute a large proportion of the miner's earnings. Those investments only yield significant returns, assuming the investing miner has done its homework, if the regulatory conditions remain constant. It's when the rules are changed, either in a regime overhaul or a significant change in policy, that forecast returns become nothing more than blah-blah-bulldust!
So when Zimbabwe, on a whim, demands the transfer of 51% of a miner's listed equity or South Africa talks of a 51% super-tax on profits, it doesn't matter much what Bloomberg's- Best (No.1 rated analyst) predicted prior to the change in rules, now does it?