Management

TheTracker

l.o.jones8686 wrote: »

Hi 'TheTracker'. Thank you for your feedback.

It's an interesting point. My view is that the market largely determines the value of a stock by the equilibrium between the buyers and the sellers in the market, and the analyst forecasts that have been predicted.

These analyst forecasts are predicated on various models, usually DCF + TNAV. It is my experience that an analyst's feeling or perception of management is seldom factored into the calculation.

Scientific studies have overwhelmingly shown that analyst forecasts are next to useless. They find that most analysts have worse success than following a broad consensus and are no better than naive "random walk" strategies. Indeed, often the same findings we see on active management strategies are found in analyst predictions. Personally, I see them more as gutter creeps as they don't even have skin in the game. In fact you could not be further from the truth, as the studies show that analysts "feelings" and "perceptions" probably do more harm than good. I'll let you google the studies.

Pinkle

TheTracker wrote: »

Personally, I see them more as gutter creeps as they don't even have skin in the game. In fact you could not be further from the truth, as the studies show that analysts "feelings" and "perceptions" probably do more harm than good. I'll let you google the studies.

There's only one thing less reliable than an analyst who doesn't have skin in the game: one that does.