| |
Abrak
|
Quote: from Golden Star on 7:58 am on Dec. 12, 2005
Abrak,
This wasn't actually my quote; I was quoting another poster. I am, of course, very familiar with the fact that an analyst often cannot express his honest opinion about a company, as that can, in extreme cases, cost him a job. The conflict of interest between the research department and, say, the investment banking department is very hard to resolve indeed.
Hmmmmm.... Actually the conflict of interest is not difficult to resolve. Noone in the investment world seriously believes that analysts give independent advice for the good of the investment manager/investor. The analyst is working for the investment bank. The brokerage and investment banking team work in tandem to raise capital and promote corporates.
|
Bangkok Girls : Meet Attractive Thai Girls
Posted on: 7:27 pm on Dec. 11, 2005
|
|
DaffyDuck
|
Quote: from Abrak on 10:41 am on Dec. 10, 2005
As a former investment analyst I can tell you we were NOT 'paid to get it right'. We were paid to generate business for our brokerage and corporate finance departments. There is absolutely no correlation between being 'correct' and the amount of business generated.
Which is why I find it odd that analysts' opinions get printed as much as they do, and/or that they carry as much weight - then again, the entire market is based on 'perception', and those interpreting perceptions are more often than not even more clueless.
Thanks (really) for clarifying once and for all an analyst's ultimate allegiance - it seems far too many people are confused.
Besides, a brokerage makes money off an investors, wether they win or lose - another fact most people seem to forget.
Quote: from Abrak on 10:41 am on Dec. 10, 2005
And Daffy if you equate past performance with future performance - comments on the lines of 'AAPL's performance over the past 5 years speaks for itself' then perhaps you should go back to the basics.
Yes, I guess you are very right, then -- how so, by the way?
|
Bangkok Women : Meet Sensual Bangkok Women
Posted on: 11:47 pm on Dec. 11, 2005
|
|
Abrak
|
Quote: from DaffyDuck on 1:25 pm on Dec. 12, 2005
Besides, a brokerage makes money off an investors, wether they win or lose - another fact most people seem to forget.
Well it doesnt quite work like that. If I, as an investment analyst, pesent a good case for buying say AAPL then that is of interest to most fund managers, investment houses, etc... If it is a good argument there is a lot of business....
Now, as an investment analyst, if I write a 'SELL' on AAPL well it really isnt that good business. For a start the only investment managers who are going to give me business are those that actually own the stock in the first place - say less than 10% of fund managers.
Simply put, buy stories are attractive to all investors (except those who are up to the whazoooo in that particular stock) while sell stories are only of interest to people who already own the stock. The bucks are in the buy stories.
|
Thai Girls : Meet Sexy Thai Girls
Posted on: 12:01 am on Dec. 12, 2005
|
|
DaffyDuck
|
Quote: from Abrak on 1:40 pm on Dec. 12, 2005
Well it doesnt quite work like that.
I thought it did - if as an analyst, you suggest purchase of a stock, of course your firm makes money. You are correct that a 'SELL' suggestion only works for those who own the stock - but life isn't all 'BUY' vs. SELL -- or rather, it is...
If you so suggest a SELL, I am sure that you also suggest a different BUY to your other clients, and furthermore, if you label a stock HOLD or neutral, you still want to encourage your customers to buy another stock, or invest as much of their money as they can.
Now, if whatever stock you recommended goes up, and the client at ne point takes profit and sell, of course your brokerage makes money of the sale.
If said stock, on the other hand, tanks and drops precipitously, the client will (often encouraged by the broker) sell it (brokerage makes money) and gets encouraged to buy another stock (Brokerage makes money, again).
Hence, as in the case of AAPL, when it regularly dips (every time, on the approx. same times, and same occasions), my (former) brokers implored me to sell (after the stock dipped) - I never did, though always bought more after those dips. So far, the strategy has not failed me.
By the way, there's one more bit of advice - and that is to invest for the long haul. Most investors are very shortsighted, and hope for quarterly profits, or better. When I invest in a stock I know, I generally intend to hold it for 5-10 years, as I plan to not need the money, nor the profits, during that time. If one goes quarter-to-quarter, one tends to make more foolish decisions, IMO.
|
Bangkok Girls : Meet Sexy Bangkok Girls
Posted on: 3:14 am on Dec. 12, 2005
|
|
Buai
|
You must have a pretty good phone HJ - Rivkin's dead!
|
Bangkok Girls : Meet Attractive Thai Girls
Posted on: 4:46 am on Dec. 12, 2005
|
|
| |
|
