Posts filed under “Valuation”

Follow Analysts at Your Own Financial Risk

One of our major themes around here is that investors need to learn to think for themselves.  That may be obvious, but unfortunately, it needs to be repeated.

In the past, we have noted the dangers of imitating the trades of Billionaires, listening to the news media, aping the pundits, or trading based on the calls of analysts.

Now, that doesn’t mean that there aren’t some analysts who have insight, or are value added. We have found that its worth paying attention to those analysts who have shown a good tracking record of forecasting earnings for a particular stock AND are outliers to the rest of the analysts forecast on that stock. But overall, the entire analyst community does not facilitate individual investors.

Which leads to this article from Bloomberg:

"Investors who followed the advice of analysts who say when to buy and sell shares of brokerage firms and banks lost 17 percent in the past year, twice the decline of the Standard & Poor’s 500 Index.

Buying shares on the advice of Merrill Lynch & Co.’s Guy Moszkowski, the top-ranked brokerage analyst in Institutional Investor’s annual survey, cost investors 17 percent, according to data compiled by Bloomberg. Deutsche Bank AG analyst Michael Mayo’s counsel to purchase New York-based Lehman Brothers Holdings Inc. lost 59 percent. Citigroup Inc.’s Prashant Bhatia still rates Merrill “buy” after its 56 percent retreat from a January 2007 record.

Of the 38 analysts tracked by Bloomberg who follow stocks in the Amex Securities Broker/Dealer Index, 31 produced losses for investors. Investors who bought brokerages on "buy” recommendations, sold when they switched to “hold” and speculated prices would decline when analysts said "sell,” lost 17 percent in the last year through June 3, compared with the S&P 500′s 8.5 percent drop.

Analysts Lose 17% for Investors in Brokerage, Bank Stock Picks
By Eric Martin and Josh Fineman
Bloomberg, June 6  2008

Category: Earnings, Trading, Valuation

Herb Greenberg’s 5 Simple Lessons

Category: Earnings, Financial Press, Investing, Legal, Valuation

Odd Data Point: Tech Passes Finance in SPX

Category: Earnings, Finance, Index/ETFs, Markets, Valuation

Buffett Sees ‘Plenty’ of European Acquisition Targets

Huge, nearly an hour long Buffett video, via Bloomberg:

click for  l o n g  video

Billionaire Warren Buffett speaks at a news conference in Frankfurt at the start of a four-city European tour about his investment strategy and plans to add European companies to the portfolio of his investment and holding company Berkshire Hathaway Inc. Eitan Wertheimer, president of Israel’s Iscar Metalworking Cos., also speaks.

See also:  Buffett’s Shopping Trip to Europe Draws a Crowd


Buffett Sees ‘Plenty’ of European Acquisition Targets: Video
Bloomberg, May 19 2008

Category: M&A, Valuation, Video

S&P500 Profits Ex 3 Oil Cos = Awful

Category: Earnings, Energy, Valuation

Confessions of a Short Seller

Category: Psychology, Short Selling, Trading, Valuation

Only 5% of Wall Street Recommendations Are “SELLS”

Category: Investing, Psychology, Valuation

Oil Bubble?

Category: Commodities, Earnings, Energy, Psychology, Technical Analysis, Valuation

What Is Yahoo Actually Worth ?

Category: Corporate Management, M&A, Valuation

Bear Markets Seduce Investors

Category: Markets, Psychology, Technical Analysis, Valuation