The Political Fray - Political Forum
Go Back   Political Fray > The Political Fray > Economics

Economics For discussion about economics, financial markets, investing, stock markets, finance, and economic theory

LinkBack Thread Tools Display Modes
Old May 8th, 2018, 08:18 AM   #1
arcturus88's Avatar
Joined: Oct 2012
From: NC
Posts: 1,846

Why you can’t trust Wall Street analysts

Good article. I've long since noticed that the stocks I buy tend to have a rating of "buy" from these analysts. I didn't know that they all have that rating!

Why you can’t trust Wall Street analysts

<H6>The folly of ‘guidance’

Many companies provide earnings “guidance,” which analysts incorporate in their estimates. For companies, guidance — in other words, the outlook — is designed to “under-promise and over-deliver,” in order to set up earnings beats, which propel the stock higher.
Analysts are much more likely to rate stocks buy than sell, and if the beats help push stock prices higher, their track records as stock pickers look better.

The conclusion: If you invest in stocks, you had better take analysts’ ratings and earnings estimates with a grain of salt.
Analysts’ biases

Analysts’ research can be help investors learn about companies, but you have to do your own research to understand if a company can make it in the long run. A broad look at sell-side analysts’ ratings shows a strong positive bias, along with outlooks that are far too short.
For generations, stock brokers have made investment recommendations to clients, often backed by their firms’ equity-research departments. Regulations are supposed to keep sell-side analyst operations separate from firms’ investment-banking operations to assure objectivity. But that doesn’t seem to be happening
arcturus88 is offline  
Old May 8th, 2018, 08:28 AM   #2
Ralph47's Avatar
Joined: Nov 2017
From: Behind the 8 ball
Posts: 2,452

I never have.

Ralph47 is online now  

  Political Fray > The Political Fray > Economics

analysts , can’t , can’t , street , trust , wall

Thread Tools
Display Modes

Similar Threads
Thread Thread Starter Forum Replies Last Post
Occupy Wall Street, Capitalism's Death Rattle? charleslb Current Events 7 November 13th, 2011 05:11 PM
Occupy Wall Street? kowalskil Economics 1 November 11th, 2011 08:03 AM
Occupy wall street garbage to be evicted so that the vile conditions can be cleaned Patrick Government and Politics 1 October 13th, 2011 05:30 AM
Observations on the wall street "occupiers" Patrick Government and Politics 2 October 7th, 2011 02:02 PM
Wall Street protests - not on any news channel - This is democracy netanyahoo Government and Politics 9 October 6th, 2011 05:33 PM

Facebook Twitter RSS Feed

Copyright © 2009-2013 Political Fray. All rights reserved.