Youāre right in most fields that people do tend to listen to experts so it is a bit unusual and Iāve never thought of it that way.
But a JPM or MS arenāt exactly going to downgrade a client are they? The financial experts have had a bit of a tainted history through the years, which again impacts trust. I do acknowledge it would be unfair to brand them all as one.
For me, albeit Iām new itās generally that you canāt see the info behind the calc so i wouldnāt want to blindly believe them.
A lot of these experts are not satisfied to choose between the company who pays their salary (selling the āproductā) and the consumers (buying the āproductā). But this happens in every sector. In the end, everyone have to put food on the tableā¦
Thatās why I think the research should be totally outside of the market players. The inside research should only be used as proprietary data by their employers.
Something not spoken until now, but also related. The credit ratings agencies, that are paid to rate the companies that paid them to rate in the beginning.
And the āanalystsā selling CDOs and other structured products. Besides selling the stocks of (subprime) mortgage lenders and the stocks of some investment banks (Lehman Brothers, Bear Stearns, Merrill Lynch). All with good analyst ratings. We know how the story ended.
I donāt tend to take much notice of it generally but if I hold a stock thatās massively over the average price target Iāll take a look at whether its time to sell, similarly if a stock is at 20% of the average price target Iāll maybe look at it further to see if its a ābuy the dipā scenario
More often than not it just reassures me that people with more intelligence than me have probably made the same mistakes as me, albeit theyāre bagholding millions of loss whereas Iām wounded that my stock is 50% down and Iām Ā£0.57 in the holeā¦
I personally find it they are useful. You could also see their rating. The free version of tips rank does not give you the name of the analyst and the individual rating. All they provide is the average analyst rating. I am more interest in the analyst who have a proven track record of the stock in question.
Information provided by etoro or market beat might be more useful as you could find which company, they are working also the date when the price target are created. In Etoro you could even find their rating
But also, be aware that a few analysts are using this price prediction for their own interest. For interest when they are shorting the stock, or they have not bought it they intend to downgrade the stock so they could short or buy it.
Eric Wold B.Riley Financial Hold $16.00 Reiterated 10.08.21
Alicia Reese Wedbush Hold $7.50 Reiterated 26.07.21
Eric Handler MKM Partners Sell $1.00 Reiterated 08.06.21
Alan Gould Loop Capital Markets Sell $1.00 Reiterated 01.06.21
Jason Bazinet Citigroup Sell $3.70 Reiterated 25.05.21
The people who provide the rating $1 might be the one who are shorting the stock and now they cannot exit. Also, they might be getting paid by the short sellers. Bythe end of the day we are the person who will need to make the final decision.
