Investors Chronicle Market View

[darth trader]

There is an interesting article this week in IC. Their Market View page is titled "In defence of Analysts" and considers why the same analysts that were saying shares were good value 12 months ago are now saying that they are overvalued.

It generously says that it's because they suffer from the same mistakes that the public make and that it is genuine stupidity rather than dishonesty.

An interesting thought. I assumed that they were just downright dishonest.

Any views?

 

[titus-uk]

Ummmmm....let me think......

WE are to feel sorry for these big institutions who have made silly mistakes with their - or should I say our money when:

They have teams of highly paid "professional analysts" with a direct ear to these companies.....

Oh yes - they often get paid by these same companies for services rendered elsewhere....

And they publically release notes advising the public to buy shares in "X", whilst secretly advising their paying clients to reduce...

It makes you want to weep. Call me a cynic, but methinks dishonesty has the upper hand!

Mark

 

[Skimbleshanks]

I tend to basically ignore what analysts say, because they appear to have an ulterior motive to their buy and hold notes. If you're using TA as part of your stock selection, and especially for entries and exits, then analyst statements can be virtually ignored.

However, when an analyst issues a downgrade notice, it can have quite an impact on a stock's price which, I suppose, is just all part of the fun and frolics of share trading.

 

[ChartMan]

I agree Skim Ignore Analyst's remarks- too a point. A BUY selection by them may well move the price up a little on Monday, but a downgrade will probably move the stock a lot.A good excuse for the mm's to move the price and invoke extra liquidity in the stock.After all, the only time they make money is when they trade a share, at whatever price it may be at.The more they can buy and sell, the more they make!They don't give a monkey's about who gets hurt, so long as they can increase the no of deals they do.
Buy and large, TA is the way, and ignore the Tipsters.Better to be aware of reporting dates as just a whiff of being below par will destroy a stock. Autonomy,Railtrack, to name but two last week.
I really feel sorry for anyone who was holding these( or any others) that have tanked on results.

 

[Skimbleshanks]

In today's Financial Mail on Sunday, page 6, there is an article about analyst share recommendations. Unfortunately the link isn't yet available on www.thisismoney.co.uk.

And the conclusion of the article? Analysts appear to have a knack for failing to predict the direction of the stock market. Well, no surprises there then.

 

[darth trader]

there is a rationale for these arguments about peioples failures to predict market direction in as much that the economy works in cycles and each generation has to experience the pain in order to understand and learn from the experience.

While I can understand this in the general public can there really be any excuse in large financial institutions (with highly paid and well educated staff) that are supposedly managed by senior professionals who should have seen it all before.

Still at the end of the day there will probably be many job losses within the financial instituions as they cut back. I have recently seen an article that says they are trying to avoid this because last time they cut back they were unable to respond when the market turned.

If there is any truth in the incompetence theory then it must go right to the top.