subject: Analysts Might Not Be The The Ones You Should Be Trusting When It Comes Down To Investing [print this page] Analysts Might Not Be The The Ones You Should Be Trusting When It Comes Down To Investing
Analysts might not be the best people to trust your money with and there are several reasons why this happens. Ask other veterans and long-time traders what they think about analyst's reports and opinions. I ignore them all. Of course, I do read now and then some articles from RESPECTED and TRUSTWORTHY authorities that I know I can trust. But that is it.
With an overflow of information flying around everywhere, with people trying to get your attention as much as they can, it can be quite a daunting experience to separate and properly analyze what is worth reading and paying attention to and what is not. If I had to come with a figure, I would say that around 1% of everything that is flying around is worth reading. Maybe even less.
There are so many reasons why analysts can't really say what they really think about a company, that you might be scared of them. One reason, for example, is that companies do not like seeing "Sell" as a recommendation for their stocks in financial magazines. What happens if that show up? Probable the company's owner will make a few calls and try to make some "amendments" to that opinion. Maybe next month is only "Hold" instead of selling. This would already benefit the company and they might give some special gifts for the analysts for helping them. Do you see what is going on here?
It is know that, for some time, many analysts could not freely put a "sell" recommendation on stocks since that could potentially cause havoc in the financial markets. So, they started using other words like "Hold". Yeah, that is right. So, next time you see a "Hold" recommendation in your favorite magazine or from your favorite financial guru, think again. He might be tipping you off that you should be running to the hills.
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