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Are stock analysts ever short term on anything?

Posted on 3/12/12 at 12:42 pm
Posted by wegotdatwood
Member since Aug 2009
17094 posts
Posted on 3/12/12 at 12:42 pm

I don't think I've ever heard anyone of them say "for the short term I love stock ......"


Posted by JPLSU1981
Baton Rouge
Member since Oct 2005
26263 posts
Posted on 3/12/12 at 12:45 pm to
In the stock market, short term = gambling. Might as well bet red or black in the casino, because at least then you can get free drinks and comps.

At any given second, the price of a stock is correct according to the market and all available information. So who is to say it's going to go up or down in the short run if it is indeed correctly priced at the moment?
This post was edited on 3/12/12 at 12:48 pm
Posted by bpfergu
Member since Jun 2011
3485 posts
Posted on 3/12/12 at 12:48 pm to
quote:

I don't think I've ever heard anyone of them say "for the short term I love stock ......"


I day traded 1 to 2 month until expiration options throughout college and I don't think I ever held on to an option for more than about 3 or 4 days. I guess I am the minority, though.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/12/12 at 12:57 pm to
He said "stock analysts."
Posted by NC_Tigah
Carolinas
Member since Sep 2003
123887 posts
Posted on 3/12/12 at 5:16 pm to
quote:

He said "stock analysts."
Sort of a generic term. (Presume reference is to Moody's S&P et al.) Decent related article
Personal analysts damn sure better have "short term" opinions as well as mid-long term. The vast majority of stock consultants on CNBC, FBC seem short term focused, at least to a large extent. They are traders. Some are really good, FWIW.
This post was edited on 3/12/12 at 5:22 pm
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/12/12 at 5:30 pm to
I guess I read it wrong. When someone says "stock analyst" I think of a research analyst, when someone says "stock trader" I think of day traders or desk traders or someone that uses technicals. If someone said "stock consultant" I'd think of an EJ guy or whatever. The latter two are always short-term focused, the first one is typically not. Its a matter of semantics obviously and I'm probably more particular about it since I work in that industry. eta: No idea who is on CNBC etc as I don't watch it though, I'm sure its a mix of all of the above depending on how they feel like spinning a story.
This post was edited on 3/12/12 at 5:31 pm
Posted by greenhead11
Member since Feb 2012
922 posts
Posted on 3/12/12 at 8:43 pm to
In an old school way of thinking, investing in a stock was literally owning part of the company. Why would one own part of a company he did not believe in for the long term? I guess it would be like investing in a wife vs. well... investing in a means to a certain end . No highly paid psychologist (analyst) would likely tell you to invest in a hook up buddy. Same goes for stocks.

"Trader" does carry a different conotation. People who want to get in and get out and don't care about the business itself.
Posted by NC_Tigah
Carolinas
Member since Sep 2003
123887 posts
Posted on 3/12/12 at 9:05 pm to
quote:

I think of a research analyst, when someone says "stock trader" I think of day traders
My pragmatic side has it that anyone is an analyst if they're spending his/her day analyzing relative PEG's vs performance. Bottomline, and not meant to be anything other than a practical statement, I can throw numbers and calculations together as well as anyone I've encountered. If anyone, trader, technician, "analyst" puts numbers and perspectives out there that are of interest and/or educational to me, i'd consider the individual an analyst.

I appreciate that's perhaps a soft and inconclusive perspective.
Just giving insight as I can.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/12/12 at 9:35 pm to
I follow. Forgive me if this is rehashing stuff that's already understood, but I guess the disconnect is that the only people in finance that really look at stuff like that (PEG's vs performance although I'm not sure about that relationship?) are research analysts and IBers doing capital markets and m&a stuff. Even then its not about throwing numbers and calculations together as finance typically only involves basic algebra and somewhat advanced statistics, its knowing the economic or industry trends behind the numbers, knowing if they make sense or making sense of them, and utilizing that to whatever degree. You certainly don't need a math degree to do most finance, although portfolio management and real trading (not day trader crap) gets pretty math technical, certainly way above what I can even remotely handle or have any desire to for that matter.

As much as your statement was practical so is mine (and obviously I have no knowledge of who you converse with), but there are certainly way more people who don't know what they're talking about than do and will just throw shite on the wall (and to tie it back, maybe refer to themselves as "analysts" of some variety). People that know what their talking about are generally way less accessible than those who don't, and I'm sure you know what I mean by that, eg not paying an asset manager a flat fee, paying JPM 30k a month for research or some fund 2/20 or what have you. Its why the rich get richer (you're rich right? )

The guys that are typically on cnbc are usually trader types (fast money, its up 5% on wtf news get INNNNN NOWW lookatmyhair!!!) or wealth management/asset management types that either a) don't know what their talking about and just generalize or talk their book [caveat why I don't watch CNBC for the most part] or b) look at stuff from a portfolio level and not necessarily an individual company level. I'm just making the point that there might be a lot of people who may refer to themselves or be referred to colloquially as "stock analysts" but its not an all encompassing term and in terms of finance industry those people all do vastly different things. Again, all semantics here (but it is a messageboard so), just laying out the different understandings for the sake of future conversations. Glad you decided to rejoin the conversations btw.
This post was edited on 3/12/12 at 9:41 pm
Posted by greenhead11
Member since Feb 2012
922 posts
Posted on 3/12/12 at 10:35 pm to
Kfizzle,

Out of curiosity I'm guessing by your car tag you've got your CFA level 1 or working on the CFA? If so, you gonna be joining this highly paid analyst community?

I watch way too much CNBC. Most people during the afternoon are definitely traders. There are a lot of portfolio managers that come on, most don't divulge trade secrets. It's more like they come and get paid to convey the prevailing wall street opinion that AAPL is undervalued and KO pays a good dividend.. I like Bloomberg and fox b news for diversity, but I'm only able to stream CNBC at work thanks to ameritrade


Posted by foshizzle
Washington DC metro
Member since Mar 2008
40599 posts
Posted on 3/12/12 at 10:40 pm to
quote:

get INNNNN NOWW lookatmyhair!!!



Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/12/12 at 11:00 pm to
That's just a joke (thanks to thehiddenflask) but yeah I am taking level 2 this summer [again]. I don't watch hardly any news/finance tv but if I was forced to watch one it would without a doubt be bloomberg.
Posted by Jamie Howard
BR
Member since Jun 2007
597 posts
Posted on 3/13/12 at 8:54 am to
Research analysts are rarely short on anything because the other side of their firm is trying to land the investment banking business from the companies they are analyzing.

It's a huge conflict of interests, and one you can thank the Gramm-Leach Bliley Act for.
This post was edited on 3/13/12 at 8:57 am
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/13/12 at 9:18 am to
No, GLB re-combined the operations of commercial banks and investment banks, research analysts and investment bankers have always operated under the same umbrella in investment banks. GLB did nothing to change that, and in the post-internet bubble world there's a lot of separation between the two operations. The post-IPO bubble era is much more stringent on the separation between research, IB, and trading desks. Whether you choose to believe that is obviously up to you, but as stupid as GLB is, it didn't have anything to do with what you're suggesting.
Posted by Jamie Howard
BR
Member since Jun 2007
597 posts
Posted on 3/13/12 at 9:26 am to
I stand corrected. Would it be correct in assuming that GLB was a large reason for the financial meltdown in 08? Seems like if it was just IB selling crappy derivatives then many CB would still be alive today.

I never understood why anyone on the buy side used IB research analysts. Maybe there is more separation, but the fact remains that research and IB still operate under the same roof. I remember a couple of years ago I was taking a look at the daily reports from a pretty well known energy shop and there was a total of zero, ZERO, sell-rated equities. In 2009.

Are there any respectable stand-alone research shops that large funds use? I have to admit, I (obviously) am a little rusty on the topic.
Posted by NC_Tigah
Carolinas
Member since Sep 2003
123887 posts
Posted on 3/13/12 at 10:23 am to
quote:

As much as your statement was practical so is mine (and obviously I have no knowledge of who you converse with)
Oh, I'd agree totally. Didn't mean to imply otherwise.
quote:

The guys that are typically on cnbc are usually trader types (fast money, its up 5% on wtf news get INNNNN NOWW lookatmyhair!!!)

Love Ron Insana sitting in as an "expert".


Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/13/12 at 2:18 pm to
quote:

Would it be correct in assuming that GLB was a large reason for the financial meltdown in 08?


Contentious debate depending on who you ask and one had here and on the poliboard a lot back in the day. I'll refrain from answering one way or the other for the sake of stirring up old shite.

quote:

I remember a couple of years ago I was taking a look at the daily reports from a pretty well known energy shop and there was a total of zero, ZERO, sell-rated equities. In 2009.

Are there any respectable stand-alone research shops that large funds use? I have to admit, I (obviously) am a little rusty on the topic


Like I said in my response to NC_Tigah there's a lot of people that run around acting like they know what they're talking about and don't. Certainly there are people that are just talking book too. As I said in that previous post as well, most of the quality stuff you have to pay for, and unless you're actively managing a legit family fortune its not likely you're ponying up for it. The free research that pops out on Schwab or TDAmeritrade is not exactly top notch stuff.
Posted by GregYoureMyBoyBlue
Member since Apr 2011
2960 posts
Posted on 3/13/12 at 2:53 pm to
quote:

The post-IPO bubble era is much more stringent on the separation between research, IB, and trading desks.


Heard a story about an intern in research having access to the IB share drive and made almost 15,000 in one summer. Guy obviously got caught and is banned from the securities world now, but still...kid's got balls, he's got shite for brains, but he's got balls.
Posted by tirebiter
7K R&G chile land aka SF
Member since Oct 2006
9204 posts
Posted on 3/13/12 at 3:25 pm to
If financial information known by whatever characterization of job description by said parties on whatever business media outlets was of true value it would not be given away freely to observers. In other words, utilizers beware.

Then again, many "investors" pay for useless or very marginal info via subscriptions from all knowing financial parties, too. Nobody knows nuthin or something like that.

Oh, and I loved in the gold convo/economy thread that the linked tabular statement of gold uses/demand broke out a significant number/value of gold holders as, I shite you not, "Hoarders" -not investors. I LMAO at the description. It's in the Tocqueville link.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 3/13/12 at 3:29 pm to
Tocqueville link is a great example of a bunch of clowns who look like they know what their talking about and then you click on the link and go wtf brah.
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